When Weiner testified he attempted to shift the blame for the sinking mutuals on "crooked lawyers and crooked doctors" who conspired to get huge settlements out of little companies like his.
He never mentioned management contracts.
Neither did Harry Karafin when, during the course of the hearings, he began research and wrote a series of articles about such "crooked lawyers." The effect of his research and the articles was to help shift attention from the machinations within the mutual companies to the activities of the negligence lawyers on the outside.
"The effect those articles had was fantastic," recalls one attorney. "Hundreds of negligence lawyers panicked because they knew he could make them look guilty by association. The rumors and the hassle before the articles came out was unbelievable."
What prompted Karafin to focus attention on the negligence lawyers? That is not exactly known.
What is known is that a few small mutual companies met in attorney Albert Gerber’s office, formed the Association of Fire & Casualty Insurers and paid Harry Karafin to do its public relations work. Albert Gerber also paid Harry Karafin for his services.
NOW IT’S POSSIBLE that a reporter who is doing a little public relations on the side may never face a direct conflict between his responsibility to his newspaper and his obligations to his client.
However, if such a conflict should arise, the double dealer has to make a decision between his two roles.
Harry Karafin was forced into such a decision in 1962.
It was the year of the great battle between then-City Controller Alexander Hemphill and the Broadway Maintenance Corporation.
Despite the fact that a Pittsburgh grand jury recommended indicting its top executives for payoffs to city officials in 1951, Broadway Maintenance was awarded a quarter of a million dollar contract to maintain Philadelphia’s street lights in 1957. A year later it was paid an additional $75,000 a year to maintain 5000 of the city’s parking meters.
By the end of 1961, the company was getting $585,000 to take care of he lights and $180,000 for maintaining the parking meters.
Hemphill issued a detailed report charging, among other things, that Broadway was failing to replace burned out street lights, neglecting parking meters, falsifying and destroying work records, padding its bills and conspiring with City officials.
The charges were serious and Hemphill refused to clear payments to the New York-based outfit.
But from the moment he made the charge, the Controller’s Office began suffering amazing abuse both from City Hall and in the press. Broadway Maintenance sued Hemphill and the City for its money; and even before there could be any adjudication Mayor Tate was telling the press that he thought Broadway was a great outfit and that he had no plans to drop its services. What’s more, he said, he’d like to "blow the whistle" on Hemphill’s investigation.
Says Gilbert Stein, then Hemphill’s deputy, "We couldn’t figure it out at the time but Broadway seemed to have a very good press."
Harry Karafin, of course, had the inside story. He had sat down many an evening with Broadway’s Philadelphia vice president Arthur Pierce to discuss the matter. He wrote that the city would be in "a chaotic condition if the dispute is not settled."
"Broadway," he reported, "has offered to negotiate its differences with the city out of court in the wake of a year-long investigation by City Controller Alexander Hemphill …"
A few days later he reported that revenue from parking meters was up (during the time of Hemphill’s investigation and that Department of Streets Deputy "Michael J. Gittens …attributed much of the boost in collections to ‘a good maintenance program’ conducted by both the city and its private contractor, Broadway Maintenance Corp." (Gittens later resigned under pressure.)
An Inquirer editorial asked for: "Plain Words from Hemphill," implying that the Controller had failed to substantiate his charges.
Common Pleas Judge Leo Weinrott Hemphill to stop blocking payment to Broadway. He was backed by the State Supreme Court. The city gave the company a record $800 000 contract for another year.
Hemphill bitterly charged that he’d failed to get support from anyone in City government, including City Solicitor David Berger.
During the time Harry Karafin was covering and writing articles for the Philadelphia Inquirer about the dispute with Broadway Maintenance, he was being paid by Broadway Maintenance more than $10,000 a year. He is still on Broadway’s payroll.
Last month, Broadway’s vice president Pierce, who acknowledged he is in charge of every aspect of the maintenance firm’s operation in Philadelphia, said he never paid Harry Karafin for anything and did not know of any payments to him by Broadway. He said, however, he would check with his superiors in New York. Shortly afterwards, Broadway’s local attorney, Howard Gittis, called and admitted that Karafin was on Broadway’s payroll. Karafin, he said, had been hired to work on an "investigative market survey" in Pennsylvania and New Jersey. He said he did not know precisely what that consisted of. How much is Karafin currently being paid for his services? Gittis said that he did not know and would not find out. He said he would provide no further information because he had heard of Karafins’ suit against PHILADELPHIA MAGAZINE and he didn’t want Broadway to get "involved."
ONE OF THE most amazing things about Harry Karafin’s career as a public relations consultant was the uncanny knack he had of showing up almost precisely when potential clients could most make use of his services.