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Propagandists to power.

Remember all the talk during the cold war about the skilled propagandists of the Soviet Union? The Russians were the master practitioners, spreading sly lies at home and abroad. Now, apparently, Russian leaders need the help of Americans to peddle their propaganda, and U.S. tax dollars are underwriting such exercises.

Last September, during a spasm of end-of-the-Administration contract-letting, the U.S. Agency for International Development awarded the Sawyer Miller Group, a consulting firm, a $6.2 million contract to assist the Russian Committee for the Management of State Property - Moscow's ministry of privatization. Sawyer Miller (recently renamed Robinson Lake Sawyer Miller) spins images. It plots P.R. strategy for political candidates and besmirched corporations. It came to the rescue of Drexel Burnham Lambert when that company was under siege for pushing junk bonds; Safeway when it laid off thousands; Resorts International after it went bankrupt; and Eastern Airlines when it took on its unions. In Russia, Sawyer Miller's mission is to help the ministry sell its privatization program to a skeptical public. Many Russians have grumbled about corruption in the privatization campaign and consider the voucher scheme - under which Russian citizens were handed certificates to use to invest in companies - a joke. Some profitable companies have been bought up by people with inside information. The nomenklatura have a distinct edge in this free-for-all. And the privatization wave has yielded the country's first corporate raiders. Privatization in Russia was a front-burner item at the Tokyo summit, where Clinton pushed for the creation of a multibillion-dollar international fund to assist the Russians in this endeavor.

In its efforts to rally popular support for Moscow's privatizers, Sawyer Miller has linked up with the high-priced Madison Avenue firm Young and Rubicam and plotted and advertising blitz. For several months Russian television watchers have seen thirty-and sixty-second spots extolling the virtues of privatization. (Sawyer Miller used public opinions polls to craft its ads.) Sawyer Miller also collaborated with the government news service Tass to produce twenty-two one-minute pro-privatization news spots and a half-hour segment to be aired as a news show. Recently the firm sent advance teams to towns and cities across Russia to organize Privatization Days, celebrations that included rallies and music shows. The American experts helped plan a Rock Concert for Privatization scheduled for July 10 in Red Square. Sawyer Miller came close to overt political intervention when it flooded the air-waves with pro-privatization advertisements on the eve of the national referendum on Boris Yeltsin and his economic policies in April.

The do-gooders of Sawyer Miller want to do well. In a letter to A.I.D. last November, the firm requested that the agency O.K. an increase in pay for Mark Malloch Brown, a Sawyer Miller vice chairman working on the Russian project, from $320 per day to $1,150 per day . (Since his annual salary was $300,000, the company argued, he deserved compensation higher than the standard A.I.D. rate) Sawyer Miller also asked that two of its managing directors on this project receive $460 a day. According to one Sawyer Miller memorandum, the leader of its Hungarian project - also funded by A.I.D. - received $2,435 per day in salary, bonuses and benefits.

"The senior partner is losing his shirt by being paid $320 a day," Ulrike Szalay, a Sawyer Miller associate, says. "If you're looking for a story, there's nothing here." A.I.D. did not respond to an inquiry regarding Sawyer Miller's plea for heftier compensation. But one A.I.D. memorandum notes the agency did not approve the salary hikes.

Even without exorbitant fees, the A.I.D. contract has given Sawyer Miller executives a tremendous boost. The firm has set up an office in Moscow with a staff of sixty, fifty of whom are Russians. Now Sawyer Miller is soliciting corporate clients, both Russian and Western. It is quite a gig: Collect fees from the U.S. government to promote privatization, and then cash in on the new market.

Should taxpayer dollars be handed over to professional spinners whose job is to wheedle the Russian public? And should Americans pay advocates for a foreign government ministry to enter into a joint venture with an official media organization? Why not let the Russians come up with their own state-sponsored propaganda?

The executives of Sawyer Miller are not the only free-marketeers running a state-subsidized campaign to spread the gospel of free enterprise. On January 4, weeks before Bush was out the door, his A.I.D. approved another propaganda grant. The recipient of the $266,000 contract was the Center for Strategic and International Studies, a hawkish Washington think tank and home to many former government officials. The money covers the center's management of the International Action Commission for St. Petersburg, an outfit that champions private enterprise in that Russian city. Commission members are mainly officers of two dozen Western and Japanese corporations. Senators John Warner and Joseph Lieberman also serve on the board. Its co-chairman is Henry Kissinger, who certainly adds useful business contacts to his Rolodex by sitting on the panel. The commission sponsors all the usual events: workshops, exchanges, trips. It, too, is mounting an ad campaign in Russia to bolster support for free-market economics and foreign investment.

The commission aims to promote capitalism by celebrating the history of major Western businesses, which stand to benefit by having the path into the Russian economy thus prepared for them. Will the full story of the participating companies be told? Corporations represented on the commission included United Technologies (a felonious defense contractor that posted a $333 million loss in the last quarter of 1992 and then announced plans to cut more than 10,000 jobs); Gillette (which had to be ordered to divest holdings to prevent it from becoming a monopoly); Procter & Gamble (which last year gave its chief exec a 12 percent salary boost to $1.9 million after a lackluster year); American International Group (an insurance company investigated in Florida for abusive practices after Hurrican Andrew); and Baker and Mckenzie (an international law firm fined $1 million last year for the wrongful dismissal of an associate with AIDS). The commission also boasts a top executive of R.J. Reynolds Tobacco International, who must drool at the thought of new markets in the East for his death sticks. Just what poor Russians need - a cigarette-pusher coming in and telling them the merits of foreign investment. Russian television is already swamped with commercials for Western cigarettes.

The A.I.D. program in Russia has allowed some conservative activists to underwrite their operations. On December 1, 1992 - again, late in the Bush term - the agency approved a $129,900 contract for the American Foreign Policy Council to conduct an exchange of congressional staff between Russia and the United States. The council is run by Herman Pirchner, a longtime Republican fundraiser. In recent years, its events have been attended by one of Pirchner's key clients - former Senator Bob Kasten - and a bevy of other right-wing notables. A taxpayer might justifiably worry about what will happen to a Russian who falls under the council's influence. A few years ago the council joined some of the die-hards of the right - Young Americans for Freedom, the Free Congress Foundation, Western Goals, the Moral Majority - in honoring Roberto D'Aubuisson, the late Salvadoran leader connected to death squads. It hailed D'Aubuisson as "an inspiration to freedom-loving people everywhere." The council refused to answer questions about its A.I.D. contract.

A.I.D., which is doling out $6 billion in foreign aid this year, is renowed as one of the more inept and corrupt bureaucracies in Washington - a perennial target of investigators from Congress, the General Accounting Office and its own inspector general's office. Many of its contracts smack of political favoritism. A nice touch to the last round of Bush A.I.D. grants was a $2.7 million contract awarded on November 16, 1992, to the International Management Development Center in Austin, Texas, to help Ghana develop exports. This group is directed by John Doggett 3d, the egomaniac who testified against Anita Hill during the Clarence Thomas hearings in 1991. Doggett was previously an A.I.D. subcontractor; this was the first time the agency graced him with a primary contract.

The Clinton Administration is now evaluating A.I.D. and its mission. As with so much in Washington, the real scandal is not in any particular improprietary but in the routine abuse and waste. Of all the government agencies in Washington that could use a little reinventing, A.I.D. stands out. That remaking should pencil out payments to high-flying consultants who gobble up U.S. tax dollars to tell the Russian people what their government and corporate America want them to hear.
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Author:Corn, David
Publication:The Nation
Date:Jul 26, 1993
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