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Court TV

Strippers and liquid lunches: Business as usual at Dow Jones?

By Matt Bean
Court TV

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(Court TV) NEW YORK -- As the publisher behind the financial bible The Wall Street Journal and the respected business weekly Barron's, Dow Jones is used to exposing corporate excess, not practicing it.

But in the 1990s, according to a lawsuit brought by a former employee, an extravagant and sometimes sordid world lurked behind the front pages of Barron's, complete with strippers, theater ticket loopholes and liquid lunches.

These and other perks, according to Patrick Allocco, a top ad sales representative with Dow Jones between 1992 and 2001, were funded by expense accounts meant to be used to attract potential advertisers -- until the company put a clamp on the practice in 2000, firing him as a sacrificial lamb, he claims.

Allocco's suit has been pared down considerably since he first filed it on April 5. A judge hearing the case has already thrown out some of the claims and referred others to a union forum.

But last month Dow Jones admitted in its response and counterclaim that advertising representatives at Barron's were indeed permitted to visit strip clubs and restaurants on the corporate dime and that Allocco was allowed to expense alcohol for employee parties held in Barron's offices, one of which featured an exotic dancer.

Lurid disclosures notwithstanding, the company maintains that Allocco was fired for racking up unauthorized theater ticket charges on his corporate American Express card -- $38,418.80 worth -- from 1999 to his suspension in December 2000 and for "abandonment" of his job in early 2001.

Allocco's central claim is that his managers at Barron's -- Eric Cieplik and Gary Holland -- directed him to commit expense account fraud, and he shouldn't have been fired for playing by their rules.

"Every expense I incurred was signed off on," Allocco said. "Any expense at the time had to be signed off by Eric Cieplik. It wouldn't have been possible without him." Three individual sources within Dow Jones interviewed by agreed.

But Allocco's task is to prove in court that the expense fraud was a top-down affair.  U.S. District Court Judge Lawrence McKenna weighed in with a July 10 ruling saying that it was unlikely Allocco "could have believed that his expense account practices were perfectly acceptable behavior."  But McKenna determined that one of his breach of contract claims and a fraud claim would be matters best decided at trial.

Allocco, 41, who remains unemployed, is not letting his case wind quietly through the courts. He's hired a persistent publicist and is represented by high-profile lawyer Dominic Barbara, who counts the so-called Long Island Lothario, Joey Buttafuoco, as one of his former clients.

Barbara, who frequently appears on the Howard Stern show, is quick to explain why the public should care about the internal wranglings of a Dow Jones branch.

"It's a public corporation," Barbara told  "Dow Jones and the Wall Street Journal are the ones who watch everyone else. Now someone is going to watch them."

Barbara said he was surprised that Dow Jones admitted its funds were used for strip-club lunches and office parties, calling the admissions "a smoking bra." 

Another of Allocco's lawyers, Ronald Rosenberg, denied that his team had sought to play up the juicy aspects of the case, saying, "Those are just the facts I've been given.  If they appeal to the prurient interests of some people, then that's not my problem."

But Allocco, who has on his side several current and former Dow Jones employees who back his claims that Barron's executives created and benefited from the culture of excess, even had voice mails from his Barron's office professionally transferred to a CD, ostensibly to spur Dow Jones to settle.

Settlement talks, Barbara explained, have been "unproductive."

Dow Jones and the company's lawyers at the Park Avenue firm of Gibson, Dunn & Crutcher declined to comment on the case. But a spokesman for the company, Brigitte Trafford, offered this statement:

"We believe that Mr. Allocco's case is trivial and without merit. We will contest this case vigorously. We're confident that the matter will be resolved in our favor."

'Booze-soaked' lunches

The loophole that Allocco and his managers allegedly exploited is well-mined territory throughout the business world: The expense account.

According to Allocco's suit, he and his manager at Barron's, Eric Cieplik (who is named in the suit and has since retired from the company) often went out for "booze-soaked" lunches that Cieplik made sure were charged to different representatives' cards. When lunch was finished and the check came to the table, "Give me a client's name," was the refrain.

Entertainment budgets are intrinsic to the advertising sales business, where wining and dining potential clients is an accepted practice. But according to Allocco, Barron's sales managers and representatives systematically invented clients to receive reimbursement for lunches, dinners and parties that were only attended by employees.

Dow Jones admitted in its response to Allocco's suit that its funds were used for non-client business lunches.  But lunches were only the beginning of the $150,000 to $200,000 per year Allocco says he was burning through at the peak of his tenure at Dow Jones.

Allocco moved to Barron's after two successful years with The Wall Street Journal.   Soon after he began work in February 1992, Allocco took over the sales of advertising to the import auto category-- with companies like BMW, Mercedes and Jaguar, it was the largest ad sales sector.

Billing those clients, and others, for expenses unrelated to attracting their business appeared to exploit coarse expense accounting at Barron's, according to Allocco, where the entertainment fund was tracked as a large pool rather than as individual accounts. As a result, until the installation of a new, online system in 2000, Allocco said, "they could never track what was spent in the company."

Dow Jones did not respond specifically to this claim in its response.

According to current and former Dow Jones employees familiar with the advertising department Cieplik made Allocco the point man for illicit expenses, signing off on questionable expenses and allowing Allocco to obtain cash advances from his corporate American Express card.

"You can't put down $300 of booze from a liquor store on an expense account," said one source. "The managers made him the go-to guy."

The wellspring of cash-financed monthly bacchanalias were "for birthdays, graduations, promotions, engagements, marriage, divorces or any reason whatsoever," Allocco claims in the suit. Many of the celebrations revolved around alcohol. The suit charges that his superiors at Barron's encouraged a culture of drinking in which employees were "required to keep up with their supervisors, drink for drink, or risk being ostracized."

Fraudulent expense accounting also bankrolled frequent trips to strip clubs for employees. "On occasions too numerous to mention," states the suit, Allocco was "instructed to use the corporate American Express card and/or take cash advances to pay for excursions to strip clubs such as 'Scores,' 'Stringfellows,' 'Billy's Topless' or 'Camelot' in Washington, D.C."

Like most ruby-light establishments, Scores, a high-end strip club with a strict dress code, has discreet billing processes, which allow credit card purchases without an itemized statement. A representative from Scores said that the purchase of so-called "Diamond Dollars" would be billed as "IMB Restaurant" on a credit card account. And the billing for Stringfellows registered as "SONY" on the statement, said Allocco, and would then be entered into the expense form as "Sony's Restaurant."

All of these expenses were reimbursed under the guise of client entertainment. At one point, according to Allocco, ad representatives ran out of client names, so they made them up. "There was a sales rep that I knew who even started using the names of state forests," he said.

In one of the most ribald abuses of company policy Allocco details, a stripper was brought to the office for the birthday of marketing director Don Black. According to several employees, after peeling down to a G-string, she provided lap dances to many of the men present as a boom box pumped away in the background.

"These were senior guys," Allocco said, noting that the women in the office kept quiet.

Enter, stage right

At Barron's, the strip clubs and expensive lunches were soon eclipsed by a more costly vice: Front row theater tickets. Allocco had connections with ticket brokers and house seat managers on Broadway to ensure access to the best shows for his managers and peers.  The litany of shows Allocco bought tickets for rivals the line-up at the Tony awards: "The Iceman Cometh," "Cabaret" and "Annie Get Your Gun" among many others.

The cache of first-rate theater tickets made him popular within the company, and he was soon snagging seats for members of the board of directors.

"I had the connections with the house tickets people on Broadway to get seats to anything in the first 10 rows," said Allocco. "The most popular request was 'Lion King.' Thank God I was gone before 'The Producers.'"

In one of the voice mails provided to, the president and editor of Barron's, Ed Finn, cancels a golf outing with Allocco because he has been invited by Jim Ottoway Jr., a senior vice president with Dow Jones, to go to a play, David Hare's "Amy's View," starring Judi Dench. The only hitch: He needs four tickets.

"This is an ideal chance for you to suck up if you can find tickets to 'Amy's View' on May 20 for four people," says the cordial Finn in a recording of the May 11 voice mail. "Jim Ottoway will forever be in your debt -- or at least he'll know better who you are."

According to the counterclaim filed by Dow Jones, Allocco's theater ticket racket began as an aboveboard expense, but soon spiraled out of control.  According to the company, Allocco "failed to adequately account for numerous expenses" between April 1999 and December 2000, often supplying only copies of uncanceled personal checks allegedly used to purchase the tickets.

Dow Jones alleged in its counterclaim that Allocco even falsified reports, including four photocopied ticket stubs in one expense report for "Cabaret" tickets that were actually only two tickets, copied twice.  The company also says that Allocco billed Dow Jones for restaurant and grocery expenses near his New Jersey home.

The end of the party

The whirlwind of soirees, strip clubs and front-row seats came to an end in July 2000 when Dow Jones switched to an online expense accounting system and incoming Barron's executive Mike Ahern began to look into the company's expense policies.

As the conduit for much of the excess, Allocco was far outspending his colleagues. His account jumped off the page. According to the Dow Jones counterclaim, Allocco claimed $116,000 in expenses through November 2000, despite an annual budget of only $25,000.

On December 18, 2000, Allocco was summoned to a meeting with Ahern and his immediate supervisors, Cieplik and Holland. Both parties agree that at the meeting, Cieplik and Holland -- who Allocco claims signed off on all his expense reports -- grilled him on his expense account.

But what happened next is in dispute.  Allocco claims that he told his superiors that they had approved his expenditures, and the pair responded by asking for his resignation. He said he refused, and within hours of the meeting, he was suspended without pay.

Dow Jones, however, states in the counterclaim that Allocco retreated to his car saying he needed to search for e-mails showing the expense discrepancies were the result of fetching theater tickets for his co-workers and superiors.  Then, 45 minutes later, he returned, claiming his wife must have removed the e-mails from his car.

According to Dow Jones, Allocco was ordered to attend a mandatory meeting on Jan. 8, 2001.  Allocco denies being notified of this meeting.  Either way, on January 16, 2001, he was fired.

Sources still with the company side with Allocco. "I think Pat got a raw deal," said one current employee. "You can't force the guy to spend money and then push him out the door."

Reached at his Easton, Connecticut, home, Cieplik declined to comment, referring to Dow Jones' lawyers.  Cieplik confirmed that he retired from Barron's, but denied that his former employer had barred him from discussing the lawsuit.

Whether his suit pays off or not, Allocco says he has at least forced the publisher to admit some of the company-sponsored improprieties.

"This is a company gone wild," Allocco said. "You can't just run a publicly traded company like the Playboy Club and then fire Hef's assistant for having too much fun.

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