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In the numbing days after September’s terrorist attacks in New York and Washington, D.C., McDonald’s Corporation sprang into action. It set up mobile restaurants for rescue crews at the World Trade Center and Pentagon sites, serving hundreds of thousands of meals. The company’s corporate citizenship marked a high point on the roller coaster Gloria Santona has traveled in her first few months as McDonald’s general counsel, vice president, and corporate secretary. When Santona’s job was supersized in June — from general counsel of McDonald’s USA to that of parent company McDonald’s Corporation, which operates 29,000 restaurants in 120 countries — so were her headaches. Santona, 50, who joined McDonald’s as an attorney in 1977, replaced veteran GC Jeffrey Kindler, who slid up the golden arches to president, new brands. Santona quickly found herself in the midst of two legal and public relations messes. Take the great fast-food fix. In September a federal grand jury indicted 21 people in eight states on charges that they had defrauded McDonald’s of about $20 million in cash and prizes by rigging promotional contests since the 1980s. The alleged ringleader, Jerome Jacobson of Lawrenceville, Ga., was an ex-cop and security director for Atlanta-based Simon Marketing Inc., the company hired by McDonald’s to make sure that the games were legitimate. Jacobson pleaded innocent, but four other defendants pleaded guilty in late September. As if the news wasn’t embarrassing enough for the company, plaintiffs’ lawyers and McDonald’s patrons nationwide filed a deep fryer full of class action suits against McDonald’s and Simon Marketing, as well as contest sponsors, including The Walt Disney Company and the ABC Television Network. Even Regis Philbin, whose name was on the “Who Wants to be a Millionaire” contest, didn’t escape their wrath. Most of the suits charge that McDonald’s defrauded its customers by luring them to buy food with promotional contests the company knew wouldn’t likely be won by any diner. One suit filed in New Jersey federal court charges McDonald’s, along with Simon marketing and the individual criminal defendants, with violating civil racketeering laws. “There is plenty of evidence of racketeering by the individual defendants, and McDonald’s and Simon Marketing were part of the enterprise — they clearly benefited,” says Pleasantville, N.J., plaintiffs’ lawyer Constantine Economides. “McDonald’s and Simon should have caught it.” Neither Santona nor any other McDonald’s representatives returned repeated calls seeking comment, and McDonald’s has yet to respond formally to the lawsuits, which were pending at press time. The contest conundrum comes as McDonald’s continues to fight another high-profile flare-up: the French fry fiasco. A Hindu lawyer in Seattle, Harish Bharti, filed class action suits in May in Washington and California state courts against McDonald’s. He sued on behalf of vegetarians, after learning that the company flavors its French fries in the U.S. with beef extract. McDonald’s responded that it has never claimed its American fries were vegetarian products, only that they were cooked in pure vegetable oil. McDonald’s apologized in August for confusion over its ingredients list. Bharti did not drop his suits, though, and did not return calls seeking comment. Despite some bad press, neither of these squabbles appears to have damaged McDonald’s bottom line. The company said third-quarter earnings would beat analysts’ estimates of $.40 a share by a penny or two — a welcome finding on the heels of a six-month slump that saw net income down 16 percent from the first two quarters of 2000. In other words, Santona’s good news/bad news roller coaster rolls on through these uncertain times.

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