NEW YORK -- A class action lawsuit alleging collusion between the federal government and prominent advertising agencies to depress the amount paid to minority ad companies for contracted work will be filed "in a matter of weeks," said Rev. Al Sharpton at a convention of his National Action Network held today at the Sheraton New York Hotel and Towers.
The lawsuit is being prepared by attorney Johnnie Cochran and will seek to sanction the government and unnamed agencies under what Cochran said was a violation of restraint of trade statutes in the federal Racketeer Influenced and Corrupt Organizations Act, or RICO law.
"We are in the process of drafting the litigation right now," Cochran said as part of a panel discussion on the NAN's Madison Avenue Initiative, which is designed to promote minority interests vis a vis the ad industry. "There is ample evidence showing that once we get these companies into court, they'll start doing the right thing."
Other panelists included Sen. Hillary Clinton, D-NY; Don Coleman, president of Don Coleman Advertising in Detroit; Louis Carr, evp, national sales for BET; Victor Field, executive director of the Association of Hispanic Newspapers; Rep. Carolyn Cheeks-Kilpatrick, D-MI; and Earl "Butch" Graves Jr., president and coo of Black Enterprise Magazine.
Sen. Clinton said she would work to promote compliance with executive order signed by former President Bill Clinton in October 2000 that would require federal agencies to pay market rates. She added that she hoped that the New York City Council would reinstate a program begun under former Mayor David Dinkins to promote more work for minority- -- or "emerging majority," as she termed it -- and women-owned firms. "The previous mayor abandoned that program and I hope the council and the new mayor take it up again," she said as she exited the conference room.
Graves noted that while that $2.4 billion the federal government spends annually on advertising is only about 5 percent of the total U.S. ad spending, the impact public spending has on the private sector goes beyond dollar figures.
"Government spending has a tremendous influence and that's what we want to tap into," he said. "As a result of bringing this issue forward, we have already struck agreements and received encouragement from companies like Pepsico, L'Oreal and Johnson & Johnson."