New York City Council to Audit Federal Biz

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NEW YORK ( -- New York City's City Council intends to convene public hearings in early May to examine how Madison Avenue has spent taxpayer money for federal government advertising accounts, particularly in regard to minority audiences.

The hearings, set for May 4, will focus attention on how public money is spent and examine the efficacy of media efforts in reaching the desired audiences. "We are going to ask the city council to take a look at Madison Avenue agencies that have been or currently are prime contractors on federal advertising accounts," said former advertising agency executive Sanford Moore, now a WRKS radio talk show host.

The announcement of the hearings is scheduled for today. City Council members Democrat Larry Seabrook, chair of the select committee on civil rights, and Democrat James Sanders Jr., chair, standing committee on economic development, are convening the hearings.

Mr. Seabrook said the goal is to see whether agencies are in compliance with terms of an executive order, signed in 2000 by former President Bill Clinton, intended to increase opportunities and access for disadvantaged businesses. Accounts that may be singled out for review, Mr. Seabrook said, include the Marine Corps, the Army, the Navy, the U.S. Postal Service and the Office of National Drug Control Policy. He did not single out specific agencies, but said, "We will look at the top agencies that have actually received contracts from the federal government."

Currently, WPP Group's J. Walter Thompson, Atlanta, creates ads for the U.S. Marine Corps; Publicis Groupe's Leo Burnett USA handles the Army; Interpublic Group of Cos.' Campbell-Ewald, Warren, Mich., is agency of record for the Navy, while sibling Foote, Cone & Belding, New York, handles the Postal Service. WPP Group's Ogilvy & Mather, New York, handles the Office of National Drug Control Policy or ONDCP.

Anti-drug messages
Mr. Moore cited as a particular area of interest the alleged 1999 increase in anti-drug ad messages directed at African-Americans, which responded to criticism from members of the Congressional Black Caucus. That group in 1999 questioned why the Office of National Drug Control Policy was spending $10.9 million on Hispanic ads but only $3.2 million on African-American media; $2.2 million on Asian-American media and $347,000 in Native American media.

The City Council has no power to bring legal action against the agencies. But Mr. Seabrook said, "We are examining whether these agencies do business with the city of New York."

Ensuring inclusion
Though most of the contracts under scrutiny were issued by federal agencies, the City Council is interested because the messages created for the contracts "actually impact our constituencies," Mr. Seabrook said. "When we are talking about recruiting an all-volunteer Army, Navy and so forth, there's a tremendous amount of our constituencies that are involved. Same with the Postal Service."

The executive order signed by former President Clinton in October 2000 requires that federal offices "take affirmative action to ensure inclusion" of businesses in the small disadvantaged business program and in the business development program of the Small Business Administration and Minority Business Enterprises. It also dictates that in federal advertising, "special attention shall be given to ensure placement in publications and television and radio stations that reach specific ethnic and racial audiences."

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