Essay Sixty-Four

Over the past few weeks, the saga involving RJ Dale Advertising and the Illinois State Lottery account reached another milestone.

The latest audit of RJ Dale conducted by Governor Rod Blagojevich’s administration — which cost Illinois taxpayers $60,000 — uncovered no wrongdoing. No misuse of state funds. No covert accounting corruption. No unethical or immoral deeds. Nothing. Nada. Nil.

A Blagojevich spokesperson declared, “No improprieties have been found. Its ads are running, and the campaign is hugely successful, generating millions of dollars for the lottery and garnering national awards for its creative work.”

So what’s the catch? Well, RJ Dale’s accounting files remain somewhat messy. The ad shop failed to produce audited statements, canceled checks and other data. In fact, the special auditors viewed less information than expected, leading them to report, “Due to the insufficient reliable documentation and reconciliations of RJ Dale’s records, we have not been able to complete the objectives of this engagement.”

The special auditors instead focused on RJ Dale’s Lottery-related media activities and “did not find evidence of misuse or waste of the Department of Revenue’s funds.” Department of Revenue auditors studied a sampling of documents and arrived at the same verdict.

Based on the happy press releases and assorted proclamations, the Governor’s administration appears satisfied and ready to wholeheartedly support RJ Dale.

But it’s not over yet. An earlier review by the auditor general discovered RJ Dale didn’t have all the proper paperwork for over $2 million they had billed to the Lottery. Attorney General Lisa Madigan is investigating in this area.

Here’s a prediction on Madigan’s inevitable findings: Sloppy record-keeping with zero illegal activities.

Hey, MultiCultClassics won’t even charge taxpayers for the forecast.

The subjective truth is, RJ Dale probably needs to improve its organizational skills to stay in the big leagues. For a small- or medium-sized agency to control an account typically serviced by a huge agency demands serious revamping. And for a minority company to match the efforts of its White counterparts requires employing the proverbial “work ten times harder” formula.

Regardless, certain actions in this drama almost warrant being labeled as crimes.

RJ Dale’s image has been smeared. In this era of corporate shenanigans — as demonstrated by incidents like the recent Ogilvy & Mather billing scandal — clients steer away from suspicious vendors. It’s impossible to measure the extent of damage RJ Dale’s reputation has sustained.

Media personalities like Chicago Sun-Times columnist Lewis Lazare rushed to judgment, blowing things way out of proportion. Lazare went so far as to question Lottery Superintendent Carolyn Adam’s competence (a real cultural faux pas) and recommend RJ Dale resign the account. As expected, Lazare has not yet commented on the revelations in RJ Dale’s favor. But certain Black groups want to run Lazare out of town.

The Chicago Tribune, which has arguably done the most thorough investigative writing here, does not want to quit scrutinizing. Unfortunately, the Tribune’s perspectives have appeared semi-slanted against RJ Dale. It’s no coincidence that the publication maintains a highly conservative, exclusive personality — in other words, it’s the Whitest newspaper in the city. The chances of the Tribune completely comprehending the complexities of the situation are slim indeed. The paper even ran an editorial shortly after the last auditing results, criticizing nearly everyone and implying the presence of offenses (the unabridged editorial appears below).

RJ Dale insists being the victim of racial discrimination. Black legislators, business owners and the community at large tend to agree. Don’t count on the Governor’s administration or Attorney General Lisa Madigan to check out these accusations in the immediate or distant future. Nobody’s confessing if biased backroom politics took place, whether governmental or professional.

Perhaps other advertising agencies were being sneaky too, playing nasty to discredit RJ Dale. It would be interesting to see how DDB, the shop that previously handled the Lottery account, might fare under the same microscope. Giant advertising agencies are notorious for excessive and questionable invoicing. Did DDB undergo multiple audits during its tour of duty? If not, why?

The advertising industry continues to struggle in recruiting minorities. This sorry scenario surely won’t encourage prospective candidates to seek careers in the field. If anything, it confirms the business remains a minority-unfriendly environment.

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Here’s the Chicago Tribune editorial…

Gambling with taxpayers’ money

Published June 25, 2005

It was nice to hear from Illinois Lottery Supt. Carolyn Adams the other day, even if only in a press release from the controversial Chicago ad agency she hired for big bucks to promote the state-run games of chance.

Adams’ message? The R.J. Dale ad firm is doing a great job.

Adams may be talking to R.J. Dale about R.J. Dale, but she’s no media chatterbox. She hasn’t surfaced in recent weeks to publicly address nagging questions about the firm.

R.J. Dale has been paid more than $2 million by Adams’ lottery for work it has had trouble documenting. Questions about the firm’s billings were first raised last year by internal auditors, then by Gov. Rod Blagojevich’s inspector general, then by the state’s auditor general. Atty. Gen. Lisa Madigan is now investigating.

Another puzzler is why lottery officials were in such a rush last year to make R.J. Dale their chief ad agency and shower it with a multimillion-dollar no-bid contract, when they knew it was under financial stress.

R.J. Dale had already been doing some work for the lottery, and lottery officials had signed off on an agreement to pay R.J. Dale’s clients through an escrow account rather than let the firm pay directly. The agreement declared the account was needed because R.J. Dale was “experiencing difficulties managing the payment of its debts and other obligations as they become due.”

So we have a company with a shaky financial record handed more responsibility to spend taxpayer dollars, only later to come under the spotlight of state financial snoops for suspect billing.

The state just got back results of yet another audit and the administration is hailing it as vindication for R.J. Dale. It’s a strangely myopic interpretation. The auditors said they couldn’t find evidence the firm misused or wasted taxpayer money, but the firm’s record-keeping was so skimpy that it failed repeated requests to turn over sufficient documentation to determine one way or another whether something was fishy.

The lottery flap fits into what seems to be an emerging pattern of lax administration oversight of important and expensive state contracts. That includes a $30 million deal Blagojevich reluctantly yanked a few weeks ago from a group of politically connected consultants who were hired to devise ways to save the state money. Auditor General William Holland found very little savings but a lot of tax money spent on parties and entertainment. He referred that contract to Madigan for investigation as well.

Unfortunately, the lottery controversy has become infused with questions of race. R.J. Dale is the first African-American-owned firm to hold the lottery’s main advertising account. The firm’s owner and his defenders, including some black state lawmakers, insist it has done nothing wrong and has been singled out because it is minority-led. The allegations persist even though Inspector General Zaldwaynaka Scott, whose investigation propelled the controversy, is black.

Race isn’t the issue here. Fiscal accountability is. When the state hires a company to do a job, it requires evidence to prove the job was done. R.J. Dale’s apparent inability to do that to the satisfaction of a range of investigators over a very long period of time is the sole reason it faces continued scrutiny.

Copyright © 2005, Chicago Tribune