In my two-plus decades of sifting through press releases, I'm still nonplussed at the Mandrake-like abilities that some folks have in misdirecting the focus of the communication -- and, as a result, hoping the editor in question will somehow overlook the obvious.
The most common arena for this topspin strategy can be found in earnings reports, where 99 percent of the time the reporter's focus should be on the net income column. But any wizened PR veteran will you that if your company is, well, basically sucking wind in the profits department, lead with net revenues and a nice 8 percent to 10 percent rise in year-over-year comparisons.
My personal favorite in this category was a California-based manufacturer of frozen pastas, whose quarterly earnings release crowed about record revenues, which rose roughly 30 percent. What was buried deeper in the release than skeletons in Pompeii was the minor fact that the company posted a $10 million loss.
Last week, Big Four firm Deloitte learned a thing or two about when to use spin control and which audience it would/could work on.
The firm, which garnered headlines by agreeing to pay $50 million to settle charges that it failed to detect accounting fraud at cable operator Adelphia was, according to reports, admonished by the Securities and Exchange Commission for releasing a statement on the settlement that sort of lobbed much of the blame at senior management both at Adelphia and the executive cadre at a smaller client, Just For Feet Inc., which had also suffered an audit implosion while a D&T client. The firm accused both of deliberately misleading the auditors.
To recap the Adelphia matter, the auditing firm was charged with failing to detect fraud at the Coudersport, Pa.-based company when it combed the books for the 2000 fiscal year. The company filed for bankruptcy in 2002, when it came to light that the founding Rigas family borrowed more than $2 billion using the company credit line.
However, D&T chief James Quigley was quoted in a post-settlement statement released by the firm that "these cases raise a larger issue facing the auditing profession. Among our most significant challenges is the early detection of fraud, particularly when the client, its management and others collude specifically to deceive a company's external auditors."
To me, that sounds eerily similar to a police chief explaining that if criminals would just let his officers know when they planned to rob banks or convenience stores, then the crime rate wouldn't be so high. An SEC enforcement director was more blunt: "Deloitte just didn't do its job, plain and simple."
That actually would depend on what unit of the firm he was referring to -- the auditors or the PR department.
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