The public relations firm of Gray and Co. has failed to comply with provisions of the Foreign Agents Registration Act and the Justice Department will conduct an inquiry to determine whether the firm's actions were inadvertent or intentional, department spokesman John K. Russell said yesterday.
Federal law requires that domestic agents for foreign governments and companies notify the U.S. government of any activity on behalf of clients involving political advocacy or the dissemination of propaganda in the United States. Propaganda includes print or broadcast materials designed to improve a nation's image, affect policy or enhance investment.
Federal notification and labeling required on electronic press releases produced by Gray and Co. for two foreign clients -- the kingdom of Morocco and a Japanese public relations firm retained by the Japanese government -- was late or nonexistent in several instances, according to a second department spokesman, who spoke on condition he not be identified by name.
"It's now a question of whether or not they did it deliberately," he said.
Gray and Co. vice president Meryl Comer, who made the recent trips to Japan and Morocco, said she was unaware of the law and regretted any confusion that grew out of her activities. As a Gray employe, Comer had interviewed foreign leaders, and her reports were beamed back by satellite and aired on newscasts without notice to viewers of her relationship to Gray and Co. Comer is a former reporter for WTTG-TV here.
If Justice Department investigators find that the noncompliance was deliberate, they may take criminal, civil or administrative action, the Justice spokesman said.
The spokesman said the noncompliances include late notification of Gray and Co. broadcasting activities on behalf of Morocco and a PR firm retained by the foreign ministry of Japan; late notice of Comer's activities overseas; and failure to label as political propaganda electronic press releases produced in those countries and later disseminated in the United States via news broadcasts on Cable News Network and WTTG-TV, Channel 5.
Neither CNN nor WTTG-TV informed viewers that the reports had been produced by Gray and Co. Representatives of both the network and the station have said they were unaware of the Gray connection, an assertion disputed by Gray and Co. executives.
Gray and Co. executive vice president Frank Mankiewicz yesterday expressed surprise at news of the Justice Department inquiry and defended Gray practices.
"Jesus, that's a bureaucratic thing," Mankiewicz said of late filings. "I can't believe anyone's serious about looking into it. The purpose of filing is disclosure; I guarantee you 20 public relations firms are late" with a filing at any one time, Mankiewicz said. "We comply scrupulously with that act -- more so than anyone else because people are always looking at us."
Mankiewicz added that Gray and Co. intended to comply with what he termed a Justice Department "suggestion" that Gray affix the required labels to electronic press releases about foreign clients. "We've talked, and we're going to put the label on everything," he said.
The law's labeling provision requires that any print or broadcast materials bound by the act carry a disclaimer stating that it has been paid for by a foreign agent, that the producer of such materials is registered with the Justice Department and that such registration does not imply U.S. government sanction.
Mankiewicz said he did not know when the Justice Department had communicated with Gray and Co. about labeling, but a Justice Department spokesman said representatives of the PR firm had visited the department earlier this week "in anticipation of" a Washington Post story about the electronic press releases in question.
Records filed by Gray and Co. at the Justice Department's Office of Foreign Registration indicate that the high-powered public relations firm was at least one month late in notifying the federal government of Comer's activities on behalf of the government of Morocco.
Comer traveled to Morocco twice in February to film an electronic press release that included an interview with King Hassan II. That interview reassured the United States about Hassan's treaty with Libyan leader Muammar Qaddafi.
The law requires that a public relations company doing such work notify the Justice Department of an employe's activities in advance. Gray did not notify the government of Comer's mid-February activities until March 21, two days after Comer had received press inquiries about the trip.
Gray's Mankiewicz said yesterday that the notification was late because Comer did not file it until after returning from a Florida vacation that she took upon returning from Morocco.
Comer said she was completely unaware of the federal law's existence or provisions: "I'm on the production side of it. My reaction was 'What law?' I didn't know anything had to be signed until I came back."
The act also requires that a company notify the Justice Department within 48 hours of the dissemination of printed or broadcast material such as the Morocco and Tokyo broadcasts. Gray and Co. to date has made no such notification for either the Morocco spot (which appeared earlier this month) or one from Tokyo that aired in January.
Gray and Co. has filed no notice of Comer's travels to Japan late last year, a trip paid for by a Gray client, Teramura Inc., a Japanese public relations firm hired by the Japanese foreign ministry to produce publicity for Japanese Prime Minister Yasuhiro Nakasone's U.S. visit in January.
Gray and Co. did notify Justice of the presence of other Gray employes in Tokyo during the same period, including C. Jackson Bain, a Gray vice president who also worked on electronic press releases for the Japanese client.