A little squabble has erupted between two PR firms in Los Angeles. According to our sources, GMMB Inc., the politically connected public relations firm there, filed a lawsuit late last week against a former subcontractor Durazo Communications Inc. In the lawsuit, GMMB claims, "Defendants misappropriated at least $2.8 million and refuse to provide an accounting of the monies and refuse to return said monies."
The $2.8 million had been earmarked to pay for Spanish-language television ads that were part of the preschool campaign, "First 5 California." GMMB had hired Durazo to help with Spanish-language media buys.
The lawsuit goes on to assert that Daniel and Jane Durazo, two of the firm's directors, treated their public relations firm and its funds as a "personal financial entity."
Ron Arredondo, Durazo Communications creative director, said Durazo had no comment on the lawsuit or the missing funds.
Obviously this is all just a little misunderstanding. Certainly, the new house, boat, vacation condominium, etc. that Daniel and Jane Durazo had been thinking about is all somehow tangentially part of the "First 5" campaign. Right? I would think. What happened to giving the other guy the benefit of the doubt? It's obvious that this is all just a simple matter of miscommunication.
That's said, I think this underscores a bigger issue in PR today: just how petty PR can be sometimes. I mean, it's only $2.8 million. There was a time when something "a little extra for the effort" was more generally accepted. What happened to the Industry's ability to look the other way?
As always, I encourage and look forward to your comments.
- Amanda Chapel
Durazo Communications closes shop
14 Jun 2006
LOS ANGELES: Following the June 5 dismissal of a contractual fraud lawsuit filed by former contractor GMMB, Durazo Communications has officially shuttered its doors.
Ray Durazo (the founder) sold the company to Dan in 1999. He was not involved in any of this. He (and I) found out about the lawsuit in the LA Times. In addition to embezzling this money, Dan never paid his dad all the money he owed him in for the buyout. He and his wife Jane lived in a $2million house in Newport Beach and lived high on the hog. Trips to Australia, Private schooling for the children, expensive clothes and cars, vacations, custom decorating, $100,000 yard renovation, etc. They DID use DCI as their personal financial entity. Dan used to "joke" that they couldn't buy new office furniture because Jane needed the money to redecorate the house. Everything was custom. He closed the business, laid off the staff (with no severence) sold the house and bought a $1.5 million, 5,000 sq. ft. house in Charlotteville, VA. They have since divorced.