RI Commerce Cancels Havas' Tourism Contract, Firm Hit With More Fee Cuts: UPDATED

RI Commerce Cancels Havas' Tourism Contract, Firm Hit With More Fee Cuts: UPDATED

GoLocalProv has learned that the Rhode Island Commerce Corporation has canceled its contract with Havas — the global Public Relations firm that is one of the agencies tied to the embarrassing rollout of the state’s tourism campaign. And, the firm has been hit with additional reductions in fees.

When Governor Raimondo announced the dismissal of Betsy Wall from the Chief Marketing Officer position at the Commerce Corporation on April 1, she also announced that Havas had been hit with a $100,000 fee reduction, but that number was not correct.

Havas received a letter of cancelation in March. Havas and the Commerce Corporation can renegotiate a new agreement per the initial contract.

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“As it has been acknowledged, we currently are in negotiations about the scope for year two of the contract,” said Linda Descano of Havas in an email to GoLocalProv on Friday. Commerce Corporation is not contractually obligated to continue to work with Havas.

Havas was chosen by Rhode Island in October to execute the new tourism campaign's public relations and marketing — and was slated to get $3.5 million of the state’s now beleaguered $4.5 million effort. 

How Much is the Total Reduction for Havas?

"We voluntarily agreed to a reduction of fees of $150K in February -- that's when Betsy Wall had emphasized the paid media. Then there was a $120K reduction in March -- that was another one that was a collaborative conversation,” said Descano.

“With respect to May 3, there was a reduction in fees, which happened as Havas was providing social media support for a monthly fee that ended in March. When that ended, there was an effective return of $90K. There have not been any changes to the contract [since then],” said Descano.

Whether the fee reductions were a result of reprogramming of dollars and change in priorities or penalties for Havas’ performance as a vendor is unclear. 

The Raimondo Administration communicated the return of state dollars slightly differently than Havas, although the dollar amount is essentially the same.

"The Governor announced a reduction in Havas's fees of $100,000 following the brand roll out, as well as the reduction of about $20,000 for the video from IndieWhip which was a subcontractor to Havas. This was in addition to the $150,000 reduction in fees negotiated before the brand roll out,” said Kayla Rosen at Commerce Corporation on Friday.

"Additionally, on May 3, Havas agreed to another $90,000 reduction in fees. Therefore the total amount is actually much higher than you reference: $340,000 including the reductions from both before and after the brand launch, plus about $20,000 from the subcontract to IndieWhip,” said Rosen.

Last week in an interview with GoLocal, Marian Salzman, head of Havas PR, had a slightly different take on the numbers.

Following the tourism video release (which was then pulled due to its error), the firm IndieWhip, which was hired to produce it, returned the $20,000 to the state.  At that time Raimondo also stated that Salzman and Havas had given $100,000 back to Rhode Island.  

“Yes, we did give money back,” said Salzman, who noted it was tied to a leadership decision.  “When [Wall] came here, she wanted to do more paid media, so I voluntarily gave it back. I said you believe in paid media, and I support that.”

Can Rhode Island Replace Havas?

Presently, Rhode Island’s Commerce Corporation has no contractual obligation to continue to work with Havas at the conclusion on the initial one-year agreement that concludes in the fall. The Commerce Corporation can reissue the original Request for Proposal or draft a knew RFP and seek alternatives to the New York-based Havas.

Havas has also hired one of the top lobbyists in Rhode Island, Lenny Lopes of Victor Group. Havas says they are not paying him with state dollars and he is not lobbying. Salzman claims Lopes is her “map quest” helping her navigate Rhode Island.