The abrupt departure last fall of a General Motors Corp. marketing executive is said to have sparked an internal audit of the company's advertising department.
The executive, Dean Rotondo, said he left after GM discovered that he had been convicted of a felony. He also said his departure was one trigger in the audit of the department, which oversees an annual ad budget of $3 billion.
Philip Guarascio, VP-corporate advertising and marketing, is not suspected of any wrongdoing, people close to the company said. But Mr. Guarascio, 58, could be under pressure because he did not know about Mr. Rotondo's past and in fact promoted the executive twice in little more than a year.
Mr. Guarascio is recuperating from a triple-bypass operation he underwent Feb. 2. In recent weeks, several people close to the company or to Mr. Guarascio said they heard he may soon leave GM.
"As far as I'm concerned, it's all rumors . . . and we don't comment on rumors," said Peg Holmes, a spokeswoman for Mr. Guarascio. "His prognosis is for a full recovery and we expect him back at work." Attempts to reach Mr. Guarascio in the week before he entered the hospital were not successful.
GM is said to have started the audit last fall; it is ongoing, according to a company insider. GM spokesman Terry Sullivan wouldn't comment specifically on an audit of Mr. Guarascio's department, but said, "Audits go on in the company on a regular basis. It's part of the business."
Mr. Rotondo, 39, left his post as general director of Olympic advertising and media relations on Oct. 1. He told Advertising Age last week that after GM learned of his felony, "we mutually decided to part ways."
But GM's Mr. Sullivan said the automaker learned that Mr. Rotondo was a convicted felon only after his departure, from a reporter at The Oakland Press. "We knew nothing about that case" before then, Mr. Sullivan said.
He said GM will not discuss specifics of Mr. Rotondo's departure because it is a personnel matter.
Mr. Rotondo said a routine audit of the marketing department was scheduled for February 2000. "It was accelerated with my leaving and some other things happening," he said. He declined to elaborate, except to say the department was overbudget on "some Concept:Cure stuff."
Concept:Cure is a cause marketing program that started in 1996 as a partnership of GM and the Council of Fashion Designers of America. The program, which was designed and handled by Harris Marketing Group, Ann Arbor, Mich., raises money for breast cancer research. Mr. Rotondo worked on Concept:Cure at GM.
Harris Marketing, until last summer, was the employer of Adagiso "Nick" Mancini, the brother of Mr. Rotondo's former wife. In 1997, Mr. Mancini pleaded guilty along with Mr. Rotondo to felony charges.
Under the terms of their three-year probation, Messrs. Mancini and Rotondo were prohibited from having contact with each other.
Mr. Rotondo said he had recommended Mr. Mancini for the job at Harris, where Mr. Mancini coordinated logistical issues for Concept:Cure.
Mr. Mancini left Harris last summer, and an executive close to the situation said his departure came after a Harris accountant uncovered financial irregularities. At the time, Harris President Janice Shukle called in a lawyer, who told her she had a legal duty to inform GM, the executive added.
Ms. Shukle was on vacation last week and could not be reached for comment. A Harris spokeswoman said the agency does not discuss former or current employees. Efforts to reach Mr. Mancini were not successful.
According to documents filed at Oakland County Circuit Court in Pontiac, Mich., Messrs. Rotondo and Mancini were charged in February 1997 with four counts each of fraud over $100, a criminal felony. They cooperated with an investigation and pleaded guilty in May 1997. They paid $178,922 in restitution and were given three years probation.
FALSE PURCHASE ORDERS
The charges stemmed from a company established by the two men, Pinnacle Productions, that submitted false purchase orders to a subsidiary of the Little Caesars restaurant chain that handles franchisee supplies, according to court papers. Mr. Mancini was until late 1996 a buyer for the subsidiary, Blue Line Distributing. From June 24 through Nov. 25, 1996, Mr. Mancini created four phony purchase orders, each for over $15,000, supposedly for goods Pinnacle provided to Blue Line. Mr. Rotondo cashed Blue Line's checks to Pinnacle and split the money with Mr. Mancini, according to the documents.
'A HUGE MISTAKE'
"I did a favor for a relative," Mr. Rotondo said last week. He added that Mr. Mancini had a gambling problem at the time. According to court papers, Mr. Mancini was ordered to attend Gambler's Anonymous meetings as a term of his probation.
"I made a huge mistake, but I paid the price and fixed it. The mistake I made is not disclosing it to GM," said Mr. Rotondo, who now runs a sports marketing company called Gametime.
Meanwhile, GM has yet to schedule Concept:Cure 2000, according to a spokeswoman at the fashion designers council.
Copyright February 2000, Crain Communications Inc.