Hartford Courant from Hartford, Connecticut • 124

SUNDAY, DECEMBER 2, 1979 18C Schmertz: From nnedy and Back Big-mtoKe --l ft By SALLY QUINN Washington Post Service was a steamy hot day in late July. President Carter had just made his Camp David speech on energy; angry Americans were waiting two hours in gasoline lines all oyer the country and the White House had accused Mobil of being "the most irresponsible oil company in America." -r Herbie Schmertz was fuming. He had just flown down from New York 'on the private Mobil plane to have a special meeting in his Mobil offices on Connecticut Avenue. He could only spare an hour out of his time to talk about the state of the nation. An unemotional man, Mobil's vice presi-dent of public affairs had managed to work himself up to the point that he was agitatedly adjusting his starched blue cuffs with his perfectly manicured fingers.

It wasn't just the "irresponsible" line either. He was furious about the gas lines. "Last Sunday in East Hampton I had to get up early and wait nearly two hours in line for gas after having nearly gotten lulled at George Pliaip-son's party the night before. I went for three days on my vacation with no driving. I had to use my bike.

I was outraged. -He was outraged about Carter and about what he considered a dumb energy policy. Outraged and fed up. So much so, in fact, that he had his eye on another candidate. John Connally.

"I like John Connally," he "The country would be well served by -Connally." So it was a surprise to many people when Herbie Schmertz announced last week that he was taking a six-week leave of absence from his job at Mobil to work for Teddy Kennedy for free. He will help "find andget in place various media consultants and pollsters, peo-; pie to do the TV commercials and print advertising." Here is this big oil company executive -taking six weeks of his own vacation time to, work free for a man who is against almost everything he and certainly his company stand for. True, he did work for the Kennedy administration as general counsel of the Feder-al Mediation ana Conciliation Service, and he did take a leave of absence from Mobil when Bobby Kennedy ran for president. Still. That was almost 12 years ago and times have changed.

So has the energy situation. So has Herb Schmertz. in those days he was just another former Kennedyite, a little unusual because he was working for an oil company. Today he is the most powerful, most sucessful public rela-' tions man in America. He has a budget of $21 million a year ($6 million for issue advertising, 3V to $4 mil- lion to Public Television, another 4 million to the Mobil Showcase, and $2 or 3 million for a large number of cultural projects).

He has put Mobil Oil on the map. He has instituted the form of "Op-Ed" advertising, taking our space at $3,500 a shot on the page opposite the editorial page of the New York Times for his ads. He even writes some him matter of public record. Teddy's will be an open campaign and an open administration. We'll never solve the problems of this nation unless different views get a chance to be expressed." He is working for Kennedy now he says because "Kennedy has a better chance of working with Congress (than Carter), he can bring in disparate groups, he understands the relationship between the legislative and the executive.

"Carter never understood the legislative process, never learned how to work with Congress." When Schmetz was Hrst offered a job by Mobil in the area of labor he agreed to an interview, never thinking really, that he would' go to work for them. "I had an arrogant view of the oil companies then," he says. "I thought they wouldn't hire Jewish people or Democrats. "But here I was all these things and here was a company that never discussed these things. They were never even an issue so after I thought about this I picked up the phone and called them and said, 'If you're still interested in me, I'm still interested." Schmertz says he thought these terrible things about oil companies because "they wer the basic beliefs of the groups I traveled with.

And here it was shattered before my very Schmertz says he believes economic growth is what has made this country. "My liberal politics came to a parting of the ways during the McGovern campaign. I don't go along with all these kneejerk liberal versus conservative positions like abortion, ERA and nuclear energy." Herb Schmertz realizes that the liberal view is that all oil companies are even Mobil And he has ah answer to that one ready "Historically in this country," he says, "big oil money has financed reactionary and" conservative candidates. And there's no question that independent oil men are clearly putting significant amounts of money into conservative causes. So the liberals tended to lump all oil people in the same categories.

"Historically," he says, "the oil companies have been very secretive. Until the last three or four years they relied on Congress, on a small number of legislators to take care of their interests, LBJ and Bob Kerr." Schmertz, naturally, does not think the oil companies are bad, and he believes people think they are. for one reason. "Because of what you read in the papers and what the president says. We're a good target We're defenseless.

There's no way to handle that attack. When emotions are high they go back to the McCarthy line and the people attacked are essentially defenseless. There's way to rebut Essentially no way. Peo-' pie say the energy crisis is all a conspiracy of the oil companies. Well, let's assume there is a conspiracy.

How many people would have to be in on it? Maybe 500,000. You're telling me the government couldn't find out. It's illogical and emotional. I don't know how to deal with it There's no way I can adequately handle the statement that everything they say is a lie. AP Ptwtt "People say the energy crisis is all a conspiracy of the oil companies.

Well, let's assume there is a conspiracy. How many people would have to be in on it? Maybe Herbert Schmertz to draw the line. He's like an Indian scout for Mobil, somebody who Has lived with the tribe and speak its dialect. A lot of bis liberal friends from the old days call him a sellout They feel he's been tarnished in some way. Then again, there are those who say he's just being honest.

"He's very outspoken," says head of National. Public Radio Frank Mankiewicz, who worked with him in the Kennedy campaign and now deals with him as a sponsor. "He says things people don't want to hear. He says things a lot of us are thinking, that we say privately at dinner parties. He once, said he'd never heard of a black backpacker, that environmentalists are people who already have their 2 acres that you may have to breathe a little dirty air for some people to have a job.

"He's a guy out of the liberal movement who's not afraid to express unpopular views. He's pro business and an economic conservative. That's very refreshing." "People say to me, 'Do you think you've sold says Schmertz. "I really in my. own mind have never done anything that's 1 if irrnnrnmiiii mnimrr nimi r.Mrinm iir 1 self, and edits them all He started the Mobil sponsorship of Masterpiece Theatre, the Mobil Showcase Network, and National Town Meeting.

He is responsible for bankrolling a large part of Public Broadcasting and National Public Radio including the McNeil-Lehrer Report and their uncoming coverage of next year's conventions. He even tried to buy the Washington Star for Mobil several years ago and made an offer to buy a small newspaper on Long Island. He has given Mobil an image unlike those other companies in the industry. To some, Mobil is the "nice guy" oil company, the "classy" oil company, the "public service oriented" oil company. Brought to you by Herbie Schmertz.

Recently at a cocktail party in New York Schmertz was complimented on his column on the Op-Ed page of the New York Times. He graciously accepted the compliment. Nobody seemed to think anything of it Even though his "column" was an ad. An ad for Mobil Oil. Somehow the differences have managed to blur with Schmertz.

Which is why he is so good at what he does. Herbie Schmertz is a super flack. Which is why Teddy Kennedy hired him. Regardless of his views. Never mind that he lost Oregon for Bobby.

Herb Schmertz has his own network. Herbie Schmertz is an interesting case. He is a man who calls himself a liberal yet works for the anathema of liberals, a major oil company. He likes John Connally and Ted Kennedy. He is 49 and divorced.

He eats at Elaines, the uptown literary mecca in New York, summers in East Hampton on Long Island, hangs out with journalists and writers, yet works with a group of conservative business executives. Oh, yes, he's writing a novel, "Takeover," with another Mobil Executive. Herbie Schmertz. His unlikely name sounds like a character in a Woody Allen movie. What chance have you got if you grow up with a name like that to be anything but a schlemieL Much less a big oil company executive and a glamourous Kennedy type.

Yet there he is, flying down on the company private plane from New York no shuttle for Herbie. And there he is powerbrok-ing with the television and newspaper biggies, and there he is last weekend up at Hyannis Port with his candidate, Teddy Kennedy. He orders coffee and sips it slowly. He is composed, unruffled. He doesn't like interviews much, yet having decided to go through with this one he is willing to answer any questions posed, if very carefully.

He is a philosophical hybrid. Sometimes he follows a liberal view, other times-a conservative one. There is something vaguely automated about his responses. He has an anthropological gift of being able to speak the language of those he deals with. He knows how to talk to media people which has been very helpful for Mobil and will greatly aid the Kennedy campaign.

He understands you must sponsor news programs and place ads in newspapers without demanding editorial input He knows where University in Granville, Ohio, has been an endorser. "The purpose of the ads is not so much to appear upbeat, as to say to the advertising community there is a wide range of people who read the magazine. They are not all top management or government, but people in all firofessions, all walks of life," says Gene Wil-iamson, director of promotion at U.S. News and World report in Washington. D.C.

The primary target audience of the $1 million a year campaign is the advertising community. "The purpose of the campaign is to strengthen awareness among advertising people of U.S. News and World Report asa an advertising medium. In so doing, if it happens to have a beneficial influence on circulation that's all for the good, but increasing circula-. tion is not the No.

1 objective," Williamson explains. The $1 fee was decided uponbecause "we could not. afford to spend a lot of money and secondly there is more value to a campaign" that people are willing to endorse on its merits, says the promotion director. He adds that the magazine has been approached by some who have sought a large fee, "but we've said thanks, but no thanks." caused me a bad conscience. I was born and raised during the depression.

We rooted for the Democrats and my grandfather was a local democratic politician. He was always active in Westchester. As an adult I have always been active politically on behalf of Democratic candidates." When he was asked this summer if he would take a leave of absence from Mobil to work for Teddy, Herbie Schmertz waffled. "That's an issue I don't have to answer," be said. "He's said he's not running and I take him at his word.

He laughed. That's a pretty good answer." Now Teddy is running. And now Herb Schmertz is rethinking some of his earlier statements. This summer he said that he did not discuss with Kennedy their political differences, particularly on the subject of the oil companies. "I haven't talked to Teddy about it" he said.

"I've almost never had a conversation with Kennedy about oil issues. His public views and my public views are so far apart it wouldn't be worth his time or my time. It wouldn't be worth arguing about. "Their (the liberals') assumptions are different" he said. They draw different political conclusions for a whole variety of reasons.

Teddy's introduction on a moratorium on nuclear power has got to be contrary to solving the energy problem. He believes the risks of nuclear power are worth a moratorium. I believe the risks are different" But he also held out some hope for Kennedy this summer. "His views will change," he said, "when the needs change. I don't mean politically.

Well, actually, I do When social problems become worse, when there is no sufficient housing and schools, when there is larger unemployment, then you'll see a change. The needs change and there is a mas-' sive change going on now. When the alternatives are less attractive than what's being offered it's the same as when my company comes out for rationing, the alternatives are worse or price controls, the alternatives are worse. It's the same with politicians. Politicians react to the public.

They pick the least worst" Cynics might say that Schmertz is going to work for Teddy to insure Mobile's good fortune at the White House if Teddy got elected. Connally is certainly not their problem and Jimmy Carter is felt by many energy experts to have done more for the oil companies than any president in history. And there are cynics too, including some on Kennedy's own staff, who would criticize the senator for bringing in a man whose views are the anathema to so many liberals who support Kennedy. Schmertz explains this by saying, "Well, we're old friends. I worked for both his brothers." And ideology aside, the Kennedy's are known to seek out the best.

One way for both Schmertz and Kennedy not to have to deal with the problem is not to talk to each other about it And Schmertz insists that he and Teddy have yet to discuss the issues. Today he says, "There's a tacit understanding that we have different opinions. Teddy knows my views about this. My views are a By DAVID H. RHINELANDER A battle over the management of a portion of the Medicare health insurance program for the elderly in the state has broken out between two Connecticut insurers.

Connecticut General Life Insurance Co. is now the fiscal agent for the part of Medicare that pays physicians' bills. Blue Cross and Blue Shield of Connecticut is seeking a three-year, 4-million federal grant to show that it can improve Medicare payment service in the state. Connecticut General is fighting off the attempted intrusion by Blue Cross and is preparing a demonstration grant request of its own for Washington. Better Medicare service is only part of the issue.

Both insurers admit their demonstration experiments also are designed to prepare them for a role in national health insurance. Blue Cross also wants to use its Medicare experiment as a lever with the state so that it can increase doctors' fees under its Century 90 helath insurance plan. The Medicare issue concerns how doctors are paid under Part of the federal insurance program. Less than half the physicians who treat Medicare patients in this state are willing to "take assignment" that is, to ac-. cept payments directly from Medicare for their services.

Two State On Medicare The patient by the When patient fee and the to pay must bill to reimburse frcent of the than the patient difference. Two of for months assignment in this state, below the The Toby and U.S. D-lst working The rate is now Rhode national percent Blue its experiment over the from for those assignment Century by the so that Medicare use one types of Blue health covering Blue Cross of the MagazinifSp Insurers Vie Program Chin does not like to talk about fees. "It's bad policy and I've told Gene (Williamson) that He's not dealing with the people, we are." "The important thing," says Chin "is that the copy (of the ads) makes points about U.S. News and World Report that separate it from Newsweek and Time no trivia, no cute writing, no sports, no fluff, no quips." Likewise the ads, which have appeared principally in advertising trade journals, the New York Times, Chicago Tribune and eastern editions of the Wall Street Journal are no nonsense and straightforward.

For example, above Cheryl Tieg's picture is the headline "No chit-chat" Below the picture is "U.S. News and World Report We spare our readers unimportant news. We spare our advertiser unimportant readers." Williamson says it is difficult to measure how effective the ad campaign has been. "We think we've been successful in generating much more awareness. This year is a record dollar year (for advertising)." Chin reports that tracking studies indicate that "right now even though Time magazine outspends us IS times to one, our awareness is equal among advertisers." LuA.

Times Service What can you buy for a dollar these days? Ask VS. News and World Report and model Cheryl Tiegs, baseball player Reggie Jackson, Chrysler Chairman Lee. A. Iacocca and a host of other personalities. These folks, who otherwise command and get thousands of dollars for their services receive a single dollar for advertise-X ment endorsements of U.S.

News and World Report, a weekly news magazine. The publication, which ranks third be- hind Time and Newsweek in circulation, has been known to be more conservative and stodgy than its two competitors. But since be-1 ginning its current advertising campaign in August 1977, the US News and World Report ads have become something of a status sym-1 bol in and of themselves. "The campaign has gained in popularity. It's incredible and certainly one of the most provocative (media campaigns)," says Ted Chin, whose New York-based agency Ted Chin and Co.

originated the campaign. The magazine not only seeks out ad sub-; tects who read U.S. News and World Report but is sought out as well by its readers. Cheryl Campbell for example, a student at Denison Promotions is not billed at all doctor. not accepting assignment the doctor bills the directly at his usual patient is expected the doctor.

The patient then submit the Medicare, which will the patient for 80 its accepted rate, doctor's bill is higher Medicare rate, the must make up the Connecticut's Congressmen have been working to increase the rate for doctors which ranks far rest of New England staffs of U.S. Rep. Moffett D-6th District Rep. William R. Cotter, District have been on rival approaches.

Connecticut assignment 44 percent Massachusetts is 76 percent, Island is 80 and the average is about 50 Cross is proposing in that it take claims processing Connecticut General doctors who accept It also wants its 90 rates increased state insurance division they are equal to rates. It could then system to pay both bills. Cross is the largest insurer in the state, half the population. also writes most supplemental Medicare insurance, which it calls Blue Cross 65. That policy picks up the $60 deductible and 20 percent coinsurance requirements of Medicare PartB.

Connecticut General is still putting the final touches on its proposal. That plan is expected to include a statewide phone bank that would list all the doctors who accept assignment a higher, negotiated fee schedule for the doctors, dropping the 20 percent coinsurance and speeding up claims processing. Moffett says he is considering endorsing the Connecticut General experiment "I'm glad both companies are working on the assignment problem. I'm coining down closer to Connecticut GeneraL They're already in the ball game. It's rather appealing to think of a Moffett-CG experiment proposal.

I'm as optimistic as Connecticut General about what can be done." Cotter, while not backing either has asked the Department of Health, Education and Welfare to consider an experiment that would set a higher, statewide fee for doctors, cover 100 percent of those fees and up-date their fee schedule annually. Once Connecticut General submits its proposal later this month, it will be up to HEW to decide which, if either insurer, will receive a grant If Blue Cross loses, it will remain on the outside cf Medicare Part in Connecticut Royal Machines Names New Head Fives, a Carrier executive vice president Also, Eugene J. Tallia, who for the last two years has worked in the Washington, D.C, office of the Sikorsky division of United Technologies has been named vice president in charge of the Washington office for another UTC unit, Pratt Whitney Aircraft Group. Tallia had been vice president for government relations for Sikorsky. CBT Corp.

has made a ser. ries of changes, topped off by the promotion of William Horn of West Hartford to senior vice president Horn, who had been in charge of the bank holding company's Hartford division corporate department will now be responsible for all personal trust functions in the company's trust group. Horn replaces senior vice president Norman E. Armour of Simsbury, who now will oversee various aspects of account management trol Data Corp. of Minneapolis, Both men are relocating to the Hartford area.

In other top-level corporate changes: T. Stephen Melvin of Avon, vice president of United Technologies Power Systems Division, has been appointed president of a division of Carrier a UTC subsidiary. Melvin is to head Carrier's Elliott Co. in Jeannette, Pa. Carrier is based in Syracuse, N.Y.

Melvin replaces Frank Robert Hagy, a senior vice president for American International Inc. of Chicago, has been named president and chief operating officer of Royal Business Machines Inc. Hagy, 48, succeeds James Daly, who joined Litton Industries in Beverly Hills, in October. Also, Thomas W. Dugdale has been named to the new position of vice president in charge of Royal's Roytype Office Supplies Division.

Dugdale had been with Con T- ROBERT R. HAGY.