*FEDMA Names New Chairman as Budget Deficit Surfaces

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STRASBOURG, France -- Ivan Hodac was elected chairman of the Federation of European Direct Marketing and, immediately, he had to start answering questions over a deficit in the organization's budget.

The financial troubles were discussed during the closed-door General Assembly meeting before the annual forum opened here Sunday.

Hodac said the deficit was caused by the merger of the Federation of European Direct Marketing (FEDIM) and the European Direct Marketing Association (EDMA) into FEDMA, which took place in 1997 but which only brought the two accounting systems together last year.

"If we end this year with a deficit, we'll have to look at it again, but I don't expect that," Hodac said at a press conference yesterday. He estimated the deficit at 2 percent to 3 percent of FEDMA's total budget. He would not give a dollar amount, but sources said it was in the "tens of thousands of dollars." "To be straightforward, we had some expenses we weren't aware of. They're minor, but we're running at a loss. Every merger has some surprises."

Hodac, who is senior vice president of Time Warner Europe, Brussels, Belgium, downplayed the problem and said he expects to have a reasonable cushion before the end of his chairmanship in two years. He replaces Carel Rog.

"We'll have one budget, one association but everyone will have to help. Carel did a great job getting us to this point," said Hodac, who added that fixing the budget will be his No. 1 challenge for the next few months. "Members want to see everything in balance or surplus -- not even short 1 franc. I take [the situation] very seriously."

Membership in the organization has consistently been at 500. To help grow, Hodac said he wants to look east and work to add Romania, Bulgaria, the Czech Republic and other Eastern European countries as well as some outside Europe.

The forum ends Tuesday.

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