THE ‘KINDER’ SEC HAS BIG P.R. PROBLEM
The pressure is on new SEC Chairman Harvey Pitt – and the musical chairs in the commish’s press office is a good reflection of just how hot it’s getting.
Michael Robinson, 37, a career public relations man, was named director of public affairs by Pitt last fall – and in a matter of three months was shuffled off to a lesser position, replaced by Christi Harlan.
Pitt’s first speeches were highly criticized and may have caused the change, sources said.
The speeches “smacked of a man soft on industry,” one source said – as opposed to the sharp-eyed, pitbull-like regulator critics hoped for.
Instead Pitt spoke to a group of accountants calling for a “kinder, gentler SEC” and a “new era of respect and cooperation” with auditors.
As the heat rose and criticism from the press abounded, Robinson was quietly demoted to deputy. Harlan, 44, with a long reporter’s pedigree including a six year stint with the Wall Street Journal, was named director of public affairs on Jan. 8.
Still, even Harlan couldn’t stem the criticism of Pitt’s latest attempt to clean up the accounting profession. His new regulatory body announced this week meant to oversee the scandalized accounting industry has met with sharp criticism.
The SEC declined comment on the personnel changes.
MARTHA REALLYTAKES THE CAKE!
Martha, Martha, Martha.
America’s homemaker has faced nothing but trouble in the past week because of her tight relationship with the beleaguered Kmart.
Granted, the mass merchant has paid her millions of dollars since 1997, shoring up her company’s bottom line. However, should she have to take her wares elsewhere, separating her image from Kmart’s could be a challenge.
And it doesn’t help that Martha’s perpetually brownnosing Kmart execs. The January issue of Martha Stewart Living literally takes the cake – with Kmart CEO and chairman Chuck Conaway’s birthday cake featured prominently on the cover, notes Bull’s Eye spy Lisa Marsh.
“Two years ago, when I got the idea to make a 40th birthday cake for Chuck Conaway, it was [my daughter] Alexis who suggested that the cake be made of the old Rice Krispies squares we grew up with,” writes Martha in the article about the unusual birthday cake. “Chuck’s party was for two hundred guests, so we made hundreds of big thick squares with various combinations of cereals.”
Rice Krispies? Whatever happened to good old-fashioned chocolate?
LOBBYISTS WIN HILL’S VOTE ON SEC UNION PAY RAISE
Hillary Clinton, the junior senator from New York, is usually viewed as a loyal friend of the unions. But that friendship came under strain as the Senate was deliberating a bill to cut stock transaction fees.
The bill includes a provision to raise salaries for some 2,000 unionized employees of the SEC.
A bill that raises pay for union members and cuts fees paid by average Americans sounds like one that should have gotten automatic support from Clinton.
Instead, she held up the bill in favor of emergency tax relief legislation for victims of the Sept. 11 terrorist attacks.
Lobbyists couldn’t believe Clinton’s behavior.
“It was quite wild, believe me, it was,” Kurt Vorndron, a SEC staffer who also acts as legislative liaison for the National Treasury Employees Union, told Bull’s Eye spy John Aidan Byrne.
The unions finally convinced Clinton she had to support their bill, which was signed into law by the president on Wednesday.
Clinton did not comment.
ARMSTRONG WEAKENSON KEEPING BIZ IN CITY
Michael Armstrong wants New York business leaders to do as he says, not as he does.
Armstrong, the CEO of AT&T, is also co-chair of the Business Roundtable Task Force on Security and Economic Development – the agency appointed to attract and keep business in the Big Apple.
So it’s a bit mystifying why Armstrong has sent his own New York City staff packing.
“He gutted the work force in New York City,” Laura Unger, president of local 1150 of the Communications Workers of America, told Bull’s Eye spy Mark Stamey. “It started years ago, but it’s gotten worse. Every few months we get a notice to get rid of more people.
“AT&T sold 32 Avenue of the Americas last year. Even though it is the company’s official address, they have no business there. There are only 10 clerical workers in the whole building. It used to have about 8,000 people in it. Those jobs either disappeared or went to New Jersey. Armstrong tells managers how much to cut no matter how it affects the work force.”
An AT&T spokesman disputed Unger’s account.
“I am speaking to you from 32 Avenue of the Americas,” the spokesman said when Bull’s Eye called for comment. “Lots of people work here.”
He did not say how many.
“AT&T is a New York business,” he added. “We’ve been up-front about our work-force needs for quite some time. We are taking steps to remain a preeminent New York business.”
GOLF RETAILER SUGAR MAG HITS INTO ROUGH AND FOLDS
Off the links – for good.
Two years after being named one of Golf World Business’s “Five Companies to Watch,” Sugar Mag – a retailer of women’s golf apparel – has folded.
“We were just two seconds away from success,” Karen McCarty, founder and CEO of the purveyor of pink and green duds, explained to Golf World Business this week.
McCarty, an avid golfer, had noticed there weren’t any fashionable togs to play in. She created her own line of golf and resort wear, without any business or design experience, in 1995.
McCarty was about to break out with a new golf accessory line when “market realities” and the “stress of overseeing the operation” caused her to close the company and lay off its four employees at their headquarters in Detroit.
Last week, Golf World Business announced its current five to watch: TaylorMade-Adidas Golf, apparel division; Jamie Sadock, men’s and women’s resort wear; Fairway & Greene, men’s and women’s golf apparel; Woo Gear, women’s golf apparel and accessories; and Callaway Golf Apparel, men’s and women’s.
Here’s hoping they last a little longer than Sugar Mag.