How corrupt are we? Part 1

By Gonzalo López Martí /  LMMIAMI.COM

• In the US, we like to think we live in a law-abiding society.
• We like to think corruption is a third world problem.
• Self-righteousness.
• It helps us sleep at night.
• E.g. bribing a police officer to get out of a traffic ticket is unheard of in the US.
• Which, as we well know, is commonplace in Latin America.
• The advertising business south of the border is no stranger to this type of shenanigans.
• When I worked at BBDO we lost a big regional account because, according to water cooler reports, the Brazilian office of said agency kept a slush account to direct-deposit a monthly thank-you check into the client’s marketing director’s nest egg.
• Rumors, rumors.
• A few years back, Saatchi & Saatchi allegedly had to clean up a considerable snafu in some Latin American markets over cash that was suspiciously changing hands among employees and vendors working on Procter & Gamble projects.
• Heads rolled.
• Entire departments got the sack.
• It is hard to believe the higher-ups in NY, London, Paris or Dublin were not aware of said transactions.
• As I said, gossip.
• Since we are talking about venality, I’ll quote a line by the current Argentine president (articulated during one of her frequent outbursts of lunacy): I have no evidence yet I have no doubts.
• In Latin America, stealing from a multinational corporation (particularly if it is one with HQs on US soil), is not necessarily considered theft.
• Quite the contrary.
• It is profit sharing.
• Comeuppance.
• Sad but true.
• Don’t shoot, I’m just the messenger.
• Now then, how truly immune are we to the sweet smell of the cookie jar over here in the land of the free & home of the brave?
• As of late our industry has been abuzz with gossip about some higher-up heads rolling all the way down from the rarefied atmosphere of Young &Rubicam and AT&T’s executive suite.
• Nobody knows exactly what happened but rumors point in the direction of slush.
• Once again, hard to believe the top brass in publicly traded companies of this nature are unaware of it.
• Question: what would YOU do if a client asked you for a kickback?
• You are the CEO of a big agency employing dozens of people and putting food on the table of possibly hundreds of human beings.
• Some decision-maker on the client side threatens you to put the account in review unless you pay him or her off.
• Pure unadulterated blackmail.
• Of course, you have no hard evidence.
• Would you call the FBI?
• Would you try to get a taped confession?
• Are you the whistleblower type?
• Yeah, easier said than done.
• I must say though that, in all of my professional life on US soil, I never confronted a client who asked me for a kickback.
• Or a vendor who offered me one.
• 17 years and counting.
• Mind you, I’m a totally clueless mind-reader with pretty tin-eared social skills.
• I’m brutally honest and I expect reciprocity.
• Maybe I was in fact asked for kickbacks, which I would expect doesn’t happen in overt ways, and I was just too innocent &/or stupid to get the unspoken message.
• I’ve heard it was indeed a different story back in the day when full-service agencies bought airtime and print space.
• Absorbing media discounts was a tempting revenue stream for extinct full service agencies.
• Discounts could pile up to be a lot of dough.
• At some point clients took offense alleging that volume discounts are essentially the advertiser’s cash.
• A stash a mere middleman has no business laying its dirty fingers on.
• This practice is supposed to be over, although some folks beg to differ.
• As is the case of former Mediacom CEO Jon Mandel, who openly expressed it a few weeks back at an ANA gathering.
• Today, in the realm of so-called agencies who only handle creative work, there’s less money on the table to divvy up under it.
• The kickbacks are allegedly restricted to padding timesheets and overbilling production costs such as film shoots, photo shoots, web development.
• Question: should an agency with no responsibility in media planning & buying still be called an agency?
• Can an entity that only handles creative duties be deemed an agency or is it just a boutique, a consultant?
• We’ll discuss the semantics some other time.
• Thing is, petty and not so petty white-collar criminal activity tends to emerge when someone providing a service feels he or she is not getting fair compensation.
• If someone believes they are being deliberately given the short end of the stick in a business or professional transaction, they will find ways to rationalize illegal &/or immoral behavior.
• So you keep lowering my retainer fees every fiscal year?
• No prob, I’ll pad my timesheets and expense reports.
• You wanted creativity?
• There, have some.
• The more pressure a client puts on an entity providing it with a service, the more disgruntled said entity will become.
• It kills the chemistry and the mutual good will.
• It is easier to cave to the temptation to steal when the victim is someone or something you dislike or even loathe.
• The thief can justify his or her actions under the mantle of some kind of warped poetic justice.
• In my humble opinion, the more regulated, oversized, bureaucratic, layered, hierarchical and convoluted an industry is, the more chicanery, deception and loopholes one will find.
• It becomes opaque and ripe for the taking.
• As we say in Spanish: hecha la ley, hecha la trampa.
• To be continued.