The Investment Company Institute took a swing against research purportedly showing that mutual funds charge excessive fees with research of its own by holding press conference with reporters Tuesday morning.

Judging the effort purely on its public relations merits, though, the effort could easily be scored as a strike out.

The media conference call, which included as many as 45 reporters including representatives from the New York Times, Wall Street Journal and Washington Post, turned from informative to argumentative at moments.

The low point came when the one of the authors of the study the ICI was attempting to refute tried to hijack the call. ICI Vice President Julie Domenick told an author the study the ICI was rebutting that he "should hold his own press conference."

The ICI's attempted public relations push comes as industry critics and New York State Attorney General Eliot Spitzer complain that many funds overcharge shareholders. As part of his settlement with Alliance Capital in December Spitzer went so far as to have the fund complex agree to reduce its fees.

ICI President Matthew Fink said that the ICI study ("The Expenses of Defined Benefit Pension Plans and Mutual Funds") is intended to refute suppositions about pension fund and mutual fund fees advanced in an Iowa law journal article authored by John Freeman and Stewart Brown titled "Mutual Fund Advisory Fees: The Cost of Conflicts of Interest." Spitzer cited the Freeman-Brown study in support of his contention that shareholders are paying too much in fees.

Unfortunately for Fink, John Freeman was one of the first (and most insistent questioners) on the call. Both Fink and ICI study author and economist Sean Collins attempted to answer Freeman's initial questions but Fink cut Freeman off when he insistently asked whether the ICI had included Vanguard funds in its study.

"You have already asked four questions, let someone else have a chance," Fink told Freeman. At that point a woman running the call asked Freeman to let reporters ask questions and told him he should arrange for his own press conference.

Washington Post reporter Kathleen Day then jumped in to ask the ICI officials to respond to Freeman's question. "I am asking the same question as Mr. Freeman," she repeated when asked to pose her question. Freeman could not restate the question and it was never answered.

Day continued to lobby for Freeman's participation in the call. "This is silly. You are just making this longer," she pleaded. "We are just going to call him and then call you," she continued before adding that "If this can stand the light of day ... let's have an open forum."

By that point, though, ICI officials had lost control of the call as subsequent questions from reporters from The New York Times, Wall Street Journal and Bloomberg News were put forth in a more combative manner.

Following the exchange involving Freeman, Day and Fink, The New York Times reporter pressed Freeman's point about whether Vanguard funds were covered in the study. When told by Collins that he had excluded those funds from the study, reporters seemed to become confused and even more skeptical.

"Vanguard has different operating structure than everyone else," said Collins. "They are the lowest cost operator in the industry," he said while explaining that excluding Vanguard strengthened the ICI's case rather than weakening it.

A seeming exasperated Fink then jumped in and lectured reporters that the last time the ICI published a fee study in 1999 it was chastised for including Vanguard and thereby lowering the average fund cost.

It [including Vanguard] would have driven the average under 31 bps and you would have said 'Gee, you loaded the deck'," Fink told reporters.

Pressed on the issue by a Wall Street Journal reporter, Fink again referred to the explained that "Because we have been zinged by you before, we did not include Vanguard."

The subject then turned to just what expenses were included in management fees listed in the study. ICI economist Collins said explained that it was impossible to break those estimates down for the pension funds in the Freeman-Brown study.

At that point the study's second author Stuart Brown cut in to refute Collins. "You do know what is in those numbers because we do show it in a later table," said Brown.

Much of the rest of the call consisted of reporters questioning the ICI's methodology and its claim that Freeman and Brown had been comparing "apples to oranges." In the end, the debate seemed to confuse reporters as much as enlighten them. 

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