Dr Evil’s Payday – Mother Jones

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Early one morning at the end of April, while the Today’s show Broadcast live from Rockefeller Center, a group of spectators gave Matt Lauer a T-shirt featuring the Econ4U.org web address. “I scored a t-shirt here from these people promoting economic literacy which is really good,” the cheerful presenter said, showing the t-shirt to almost 6. million viewers. Lauer didn’t know it, but he had been duped into providing this free advertisement for a group that promotes payday lending – an industry long accused of preying on low-income Americans with short-term loans carrying low rates. huge interest.

Who pulled off this publicity stunt? Credit Richard Berman, one of Washington’s most notorious public relations officers, whose exploits Mother Jones and others have chronicled it for years. Nicknamed Dr. Evil – a nickname he adopts – he is the force behind several industry-backed nonprofits that share staff and offices with his for-profit communications and advertising firm, Berman and Company. . The company promises its customers that it will “not only change the debate” but “launch” one, and a range of businesses, from Anheuser-Busch to Philip Morris to the casino chain Harrah’s, signed up for Berman’s “aggressive” and “tough” program. hit ”plea. Some clients pay Berman and Co. directly, while others donate to its nonprofits, but much of the money ends up in one place, via high management fees that front groups do. pay to Berman’s company.

Among Berman’s outfits is the Center for Consumer Freedom, which targets critics of fast food, alcohol, and mercury-laden fish. (Have you seen his ad where the “food police” snatch an ice cream cone from a little boy?) Berman’s Employment Policies Institute campaigns against minimum wage increases. And its Action Committee for the Freedom of Employees is fighting against unionization.

The Center for Economic and Entrepreneurial Literacy, the trendy outfit Today-is one of Berman’s most recent creations. Its official mission is to advance “economic literacy”. CEEL’s surveys – designed to show that Americans know nothing about finances and therefore deserve some of the blame for the current economic turmoil – were quoted in the evening news and are frequently cited in the newspapers. And CEEL has also promoted payday loans as a lifeline for desperate borrowers.

Berman’s groups are designed to appear as independent research or advocacy organizations — and a host of media, United States today to the the Wall Street newspaper to the New York Times, have a bad habit of treating them that way. Don’t they do a Google search? “Berman plays the media beautifully,” says Melanie Sloan, executive director of the Washington-based Citizens for Responsibility and Ethics watchdog group, which in January launched a campaign to shine a light on Berman’s secret public relations exploits. “The media rarely, if ever, check references of Berman’s organizations. “

This was the case last October, when Molly Hooper, then a reporter at Congress quarterly, relied on CEEL as the source for a story on financial illiteracy among members of Congress. The article appeared a day after CEEL published a survey noting that 8 in 10 members of Congress have no formal training in economics or business, a potentially powerful argument for industry players seeking to question how lawmakers would deal with the financial crisis. Hooper, who now works for The hill, admits that she did not research the group. “I’ll be honest here: I don’t remember doing that,” she said. “I remember I needed to find a group that understood how financially illiterate people are these days. James Bowers, CEO of CEEL, obligated himself with a cheeky quote: “Those responsible for solving the greatest economic crisis in generations lack the training to differentiate between commercial paper. “- a form of corporate debt -” and copy machine paper.

Given Bowers’ rhetoric and his role as the head of a “financial education” organization, you might think he is some sort of economic expert. In fact, the 1993 graduate of Indiana-Bloomington University (major: political science and journalism) is the creative director of Berman and Company, an expert in advertising and marketing, perhaps. Nonetheless, the media (Bloomberg, I’m talking to you) cites him as an authority on financial literacy, publishes his editorials without noting his connection to Berman and Co., and reprints CEEL’s survey results, frequently identifying the ‘organization like a Washington’ held research.

There is no evidence that CEEL is funded by the financial industry or payday lenders; Berman said the nonprofit is just a favorite project that “reflects issues that I think need to be addressed.” Yet some of its talking points are surprisingly similar to those that payday lenders have been repeating for years.

Once again, the press helped get the message across. In December, an AP business writer, describing CEEL as an organization that “advocates for personal finance education,” wrote about the results of its latest survey: $ 100 cost more than a payday loan, a advance on credit card or emergency bank transfer. More than half said they thought a payday loan would be more expensive. (AP made no comment.)

“That’s the most frustrating part of it all,” says Uriah King, who focuses on payday loan policy for the Center for Responsible Lending, a nonprofit that works to protect consumers from abusive lending practices. (Berman’s Center for Consumer Freedom called CRL an “arm of defense for a billion dollar financial network,” since Herb and Marion Sandler, whose World Savings Bank marketed risky subprime loans, helped found the association.) Through the press, King says, CEEL and other Berman groups are able to influence the debate without the public ever knowing they are hearing the industry go round. “It is just becoming a part of the zeitgeist, part of the conventional wisdom, that there are a lot of things worse than payday loans – and no one even knows why they believe this. “

In the typical payday loan scenario, a customer borrows on their next paycheck by writing a post-dated personal check to the lender for the loan amount plus fees. If the borrower cannot repay the loan in full when it falls due (usually two weeks later), they may be forced to extend the loan, which will incur additional charges. If the check is bounced, the borrower will also have to pay a bank overdraft fee. Critics say these expensive loans frequently plunge already vulnerable Americans into the quicksand of debt.

A variation on CEEL’s lender-friendly theme was part of an advertising blitz covering the Washington, DC metro system. Billed as a quiz on the most expensive option to deal with an “unforeseen cash flow need,” the ads read, “While a typical short-term payday loan or Western Union transfer of $ 100 costs around $ 15. USD, and credit card late fees are typically around $ 29, fees and penalties for a bad check often exceed $ 50.

Take a look at the ad in passing and it almost makes sense. But here’s the catch: If a consumer took out a two-week loan for $ 400 (closer to the state-to-state average) at the rate quoted by CEEL, the fee would be at least $ 60, and some Payday lenders charge as much as $ 30 for every $ 100 borrowed. This scenario also conveniently sidesteps the fact that the average user of a payday loan is not an “emergency borrower” but a recurring borrower: they take out an average of nine loans per year, many after one. the other, according to CRL research. .

Imperfect word

Microsoft Word has updated its dictionary to no longer suggest Osama as Obama’s correct spelling. But its latest version has yet to catch up:



Black water






to crush

plain pain

either neither


plank of wood




siphoned off


—Elisabeth Gettelman

The fact that CEEL has been advertising in the nation’s capital (where payday loans have effectively been banned since 2007) may reflect a federal struggle that is brewing. A pending bill sponsored by Rep. Luis Gutierrez (D-Ill.) Would essentially preserve the status quo for payday lenders, one of the main sources of his contributions to the past campaign. But another, defended by Senator Dick Durbin (D-Ill.), Would impose a 36% cap on interest rates. (Currently, many payday loans have APRs of 391% or more.) In June, the Durbin measure – already killed once by industry lobbyists – won a powerful ally in the Senate committee chair. banks, Chris Dodd (D-Conn.), who signed on as a cosponsor.

CEEL – and Berman’s other groups – have already started to lay the groundwork for their anti-regulatory case. Last May, in an editorial published by the Christian Science MonitorTim Miller, communications director for Berman and Co., who is also a spokesperson for Berman’s nonprofits, argued that “Americans don’t need their money to be run by paternalistic politicians. “. In a letter published recently in the the Wall Street newspaperMiller, writing on behalf of the Center for Consumer Freedom, insisted that it is unfair to apply the standard APR model to short-term loans. “Is a hotel somehow ‘predatory’ if a $ 150 a night room can cost $ 54,750 for an entire year?”

When I called CEEL to inquire about his salary plea, Miller responded. But when I asked when the group had been founded, he looked puzzled. He promised someone would call me back; shortly thereafter, I received an email saying that CEEL did not “feel confident in the objectivity of Mother Jones magazine, so we will not participate in your article. Guess that means no free T-shirt for me.

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