Voter out reach or voter suppression? Are the Conservatives keeping bad company?
Responsive Marketing Group Company has checkered history in US
By Glen McGregor and Stephen Maher
Post Media News
Wednesday, March 1, 2012
OTTAWA — The company that handles the Conservative Party’s computerized
voter-identification system and powerful fundraising machine has a checkered
legal history in the United States, where it operates call centres that have
repeatedly been the subject of lawsuits and complaints over its telemarketing
practices.
Media reports say Elections Canada is broadening its investigation of harassing telephone calls in Guelph to include former employees of Responsive Marketing Group in Thunder Bay, who called the RCMP to report concerns about calls they were making to direct voters to the wrong polling stations.
RMG issued a statement late Wednesday night asserting that it did not engage in voter suppression calls in the campaign and saying the company would contact Elections Canada to work with the agency.
Elections Canada records show RMG worked on 97 individual Conservative candidate campaigns in the last election, billing $1.4 million. The company is also believed to have worked on the Conservatives’ national campaign, but disclosure rules do not require the party to detail its suppliers.
Conservative sources say that the company does millions of dollars worth of business with the party every year, working with the Constituency Information Management System (CIMS), which tracks party supporters and opponents across the country.
Veteran Conservative organizer Doug Finley said Wednesday that he has confidence in RMG.
“The Conservative Party has been extraordinarily careful to ensure we use the best in the business,” he said.
“And the best in the business, in our view, is Responsive Marketing Group.”
RMG merged in 2010 with Calgary-based Xentel DM Inc., and has since changed the company’s name to iMarketing Solutions Group. It is publicly traded on the TSX Venture Exchange.
In response to questions put to a company official on Thursday, RMG responded with an emailed statement.
“RMG operates independently,” said the email, from an unidentified spokesperson. “RMG shareholders including the founder of RMG are the largest shareholding block in the new company. RMG’s senior executive team assumed the key management roles in the new group.”
“100% of the calls made for the Conservative Party of Canada were from contact centres located in Canada.”
The company continues to market its voter outreach services under the RMG brand.
Corporate filings suggest the federal election was a bonanza for the firm, giving it “a significant year over year revenue increase in its political fundraising and direct voter contact activities.”
But the bump was balanced by what the firm politely called “increasing consumer resistance to telemarketing activities.” The company posted $24 million in revenues on the quarter ending June 2011, down slightly from the same period the year before.
Before its merger with RMG, Xentel’s U.S. operations faced various lawsuits over allegations of sexual harassment, age discrimination, accommodation of disabled workers and, in one particularly charged legal fight, accusations that executives forged documents.
The company specialized in telephone charity fundraising drives and operated call centres in Wisconsin, Colorado, Pennsylvania and Florida.
The company had also been hit with fines over its telemarketing practices both in the U.S. and Canada. The Canadian Radio-television Telecommunications Commission fined Xentel $500,000 in 2010 for misusing the charity exemption for the do-not-call list, calling people to solicit for organizations that were not registered as charities.
A 2007 Toronto Star investigation of Xentel’s charity fundraising practices found that organizations founded with the help of a Xentel board member got little of the money raised from donors. For instance, the Childhood Asthma Foundation, for which Xentel did the telemarketing, disbursed $1.65 million in research grants, but spent $6.8 million on telemarketing and expenses.
In the United States, critics of the company have complained that it keeps too much of the money it raises through its call centres.
In 2004, the state of Missouri obtained a court order requiring Xentel to pay $75,000 for using manipulative, high-pressure techniques to solicit donations and by making repeated solicitation calls to people on that state’s no-call list, according to the website of the American Better Business Bureau.
Last year, the Tennessee Division of Charitable Solicitations and Gaming hit Xentel with $720,000 in fines for charity solicitation calls. The agency said its investigators found 144 cases in which Xentel representatives violated the state law that requires professional fundraiser organizations to disclose that they are raising money on behalf of a charity.
In securities filings, the company says it intends to “vigorously defend itself against the imposition of this penalty.”
Xentel had been also been hit with at least two sexual harassment suits at its call centres, perhaps not unusual for a large company. These all appear to have settled.
And a former Vietnam War veteran in wheelchair who worked in the Fort Lauderdale, Florida, call centre brought a lawsuit in 2008 over claims Xentel failed to accommodate his disability. It was also settled.
Another former employee brought a suit against Xentel in 2003 alleging that she had been fired for complaining that company officials had misused a notary seal for legal documents and forged contracts with clients.
Abby Smith cited Florida's whistleblower protection law in her lawsuit filed in U.S District Court, according to documents obtained by Postmedia News and the Ottawa Citizen.
Smith said she learned that Xentel officials were “changing the terms of contracts which had previously been signed by various clients, and forging the names of clients, to make it look like the clients had actually agreed to the ‘changed’ terms,” her complaint said.
Smith said she complained numerous times to management and eventually had a meeting with top Xentel executive Michael Platz, who until this past January was chairman of iMarketing Solutions Group, RMG’s parent company.
Smith was fired soon after complaining about the alleged forgery, she claimed. Xentel denied Smith's allegations and said had had been let go only for economic reasons. The case was eventually settled in mediation.
Platz, who studied at Mohawk College in Hamilton, Ontario remains a Director of the company.
Before the merger, RMG helped develop the Conservative Party’s high-tech information management system after the Canadian Alliance merged with the Progressive Conservatives in 2003.
In Harper’s Team, Tom Flanagan’s book about the Conservatives’ rise to power, Flanagan describes the key role that RMG and its president, Michael Davis, took in the growing organizational ability of the new party, working with CIMS as it developed.
“RMG was so successful with an initial prospecting experiment that the party very quickly gave all our voter-contact work to that company,” Flanagan wrote.
“CIMS provided a receptacle for the hundreds of thousands of records generated by RMG’s large-scale calling programs.”
Davis is the merged company’s second largest shareholder. Platz and he served as co-CEOs for a time, but Platz stepped down as co-CEO in January and now serves as a Director.
Conservative Party spokesman Fred Delorey said Thursday that Platz had nothing to do with the recent campaign, and that RMG did not use any American call centres.
Longtime key Conservative organizer Stewart Braddick is listed on RMG’s web site as director of the company’s Focused Direct Response program. Braddick is also listed as director, Focused Direct Response, for the American company Target Outreach Inc., which works for Republican campaigns. Sometime recently, though, the page that included his bio was wiped from the Target Outreach site.
Media reports say Elections Canada is broadening its investigation of harassing telephone calls in Guelph to include former employees of Responsive Marketing Group in Thunder Bay, who called the RCMP to report concerns about calls they were making to direct voters to the wrong polling stations.
RMG issued a statement late Wednesday night asserting that it did not engage in voter suppression calls in the campaign and saying the company would contact Elections Canada to work with the agency.
Elections Canada records show RMG worked on 97 individual Conservative candidate campaigns in the last election, billing $1.4 million. The company is also believed to have worked on the Conservatives’ national campaign, but disclosure rules do not require the party to detail its suppliers.
Conservative sources say that the company does millions of dollars worth of business with the party every year, working with the Constituency Information Management System (CIMS), which tracks party supporters and opponents across the country.
Veteran Conservative organizer Doug Finley said Wednesday that he has confidence in RMG.
“The Conservative Party has been extraordinarily careful to ensure we use the best in the business,” he said.
“And the best in the business, in our view, is Responsive Marketing Group.”
RMG merged in 2010 with Calgary-based Xentel DM Inc., and has since changed the company’s name to iMarketing Solutions Group. It is publicly traded on the TSX Venture Exchange.
In response to questions put to a company official on Thursday, RMG responded with an emailed statement.
“RMG operates independently,” said the email, from an unidentified spokesperson. “RMG shareholders including the founder of RMG are the largest shareholding block in the new company. RMG’s senior executive team assumed the key management roles in the new group.”
“100% of the calls made for the Conservative Party of Canada were from contact centres located in Canada.”
The company continues to market its voter outreach services under the RMG brand.
Corporate filings suggest the federal election was a bonanza for the firm, giving it “a significant year over year revenue increase in its political fundraising and direct voter contact activities.”
But the bump was balanced by what the firm politely called “increasing consumer resistance to telemarketing activities.” The company posted $24 million in revenues on the quarter ending June 2011, down slightly from the same period the year before.
Before its merger with RMG, Xentel’s U.S. operations faced various lawsuits over allegations of sexual harassment, age discrimination, accommodation of disabled workers and, in one particularly charged legal fight, accusations that executives forged documents.
The company specialized in telephone charity fundraising drives and operated call centres in Wisconsin, Colorado, Pennsylvania and Florida.
The company had also been hit with fines over its telemarketing practices both in the U.S. and Canada. The Canadian Radio-television Telecommunications Commission fined Xentel $500,000 in 2010 for misusing the charity exemption for the do-not-call list, calling people to solicit for organizations that were not registered as charities.
A 2007 Toronto Star investigation of Xentel’s charity fundraising practices found that organizations founded with the help of a Xentel board member got little of the money raised from donors. For instance, the Childhood Asthma Foundation, for which Xentel did the telemarketing, disbursed $1.65 million in research grants, but spent $6.8 million on telemarketing and expenses.
In the United States, critics of the company have complained that it keeps too much of the money it raises through its call centres.
In 2004, the state of Missouri obtained a court order requiring Xentel to pay $75,000 for using manipulative, high-pressure techniques to solicit donations and by making repeated solicitation calls to people on that state’s no-call list, according to the website of the American Better Business Bureau.
Last year, the Tennessee Division of Charitable Solicitations and Gaming hit Xentel with $720,000 in fines for charity solicitation calls. The agency said its investigators found 144 cases in which Xentel representatives violated the state law that requires professional fundraiser organizations to disclose that they are raising money on behalf of a charity.
In securities filings, the company says it intends to “vigorously defend itself against the imposition of this penalty.”
Xentel had been also been hit with at least two sexual harassment suits at its call centres, perhaps not unusual for a large company. These all appear to have settled.
And a former Vietnam War veteran in wheelchair who worked in the Fort Lauderdale, Florida, call centre brought a lawsuit in 2008 over claims Xentel failed to accommodate his disability. It was also settled.
Another former employee brought a suit against Xentel in 2003 alleging that she had been fired for complaining that company officials had misused a notary seal for legal documents and forged contracts with clients.
Abby Smith cited Florida's whistleblower protection law in her lawsuit filed in U.S District Court, according to documents obtained by Postmedia News and the Ottawa Citizen.
Smith said she learned that Xentel officials were “changing the terms of contracts which had previously been signed by various clients, and forging the names of clients, to make it look like the clients had actually agreed to the ‘changed’ terms,” her complaint said.
Smith said she complained numerous times to management and eventually had a meeting with top Xentel executive Michael Platz, who until this past January was chairman of iMarketing Solutions Group, RMG’s parent company.
Smith was fired soon after complaining about the alleged forgery, she claimed. Xentel denied Smith's allegations and said had had been let go only for economic reasons. The case was eventually settled in mediation.
Platz, who studied at Mohawk College in Hamilton, Ontario remains a Director of the company.
Before the merger, RMG helped develop the Conservative Party’s high-tech information management system after the Canadian Alliance merged with the Progressive Conservatives in 2003.
In Harper’s Team, Tom Flanagan’s book about the Conservatives’ rise to power, Flanagan describes the key role that RMG and its president, Michael Davis, took in the growing organizational ability of the new party, working with CIMS as it developed.
“RMG was so successful with an initial prospecting experiment that the party very quickly gave all our voter-contact work to that company,” Flanagan wrote.
“CIMS provided a receptacle for the hundreds of thousands of records generated by RMG’s large-scale calling programs.”
Davis is the merged company’s second largest shareholder. Platz and he served as co-CEOs for a time, but Platz stepped down as co-CEO in January and now serves as a Director.
Conservative Party spokesman Fred Delorey said Thursday that Platz had nothing to do with the recent campaign, and that RMG did not use any American call centres.
Longtime key Conservative organizer Stewart Braddick is listed on RMG’s web site as director of the company’s Focused Direct Response program. Braddick is also listed as director, Focused Direct Response, for the American company Target Outreach Inc., which works for Republican campaigns. Sometime recently, though, the page that included his bio was wiped from the Target Outreach site.
posted by Clare L. Pieuk at 3:31 AM
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