Credit Suisse Tax Evasion Fine is Just That: Fine

 Credit Suisse Tax Evasion Fine is Just That: Fine

THE PR VERDICT: “D” (PR Problematic) for the US government, which gave its PR team little to work with.

Credit Suisse pled guilty this week to helping more than 22,000 Americans evade taxes by stashing their cash in Swiss bank accounts — a notable event on several levels, PR included.

The deal represents the first criminal conviction of a major global bank in more than a decade. Criminal charges, it has been widely thought, are a death knell for institutions that cop to them. Credit Suisse agreed to pay $2.6 billion — the largest penalty ever in a US criminal tax case. Prosecutors huffed and puffed about how significant this plea is: US Attorney General Eric Holder warned, “No bank is too big to jail.”

But…nobody’s going to jail, at least nobody at the top. While the conviction generated a lot of media, the general impression is: It’s not so bad. Credit Suisse wasn’t forced to reveal any client names, and it can keep operating in the US. The bank’s CEO told analysts he expects little business impact from the agreement. Indeed, Credit Suisse stock actually rose after the deal was announced.

No doubt the US faced a conundrum: Regulators wanted to inflict serious pain, but too harsh a penalty might be so destabilizing as to spark unintended (and unwelcome) consequences. After all, the threat of banking failures precipitated the last global recession. So they walked a line — and that’s exactly how the media read it.

THE PR VERDICT: “D” (PR Problematic) for the US government, which gave its PR team little to work with.

THE PR TAKEAWAY: Actions speak louder than words. Are we really shocked, shocked, to discover that Swiss banks help people hide money? Yes, the fine is big, but even the general public has become inured to banks paying massive sums. If the US really wanted to send a message to tax evaders and the banks who love them, regulators needed to be more visible: name-and-shame clients, or put some white collars in orange jumpsuits. There’s nothing like a CEO in handcuffs to really command attention.

BP’s New PR Tactic Is Its Own Disaster

unnamed 150x150 BPs New PR Tactic Is Its Own Disaster

THE PR VERDICT: “D” (PR Problematic) for BP.

Energy company BP is shifting PR gears. In 2010, after the Deepwater Horizon disaster that left 11 oil rig workers dead and the gulf off Louisiana slick with millions of gallons of oil, the company’s PR was geared entirely toward apologies and vows to right the wrongs done. A massive cleanup effort was launched to save the coastline. Payments were promised to the many businesses affected – some perhaps irreparably, such as those of independent fishermen whose catches were contaminated.

The days of apology are apparently over. An article in the weekend edition of the New York Times illustrates a shift in attitude from the international energy giant. BP, once all apologies, is now on the defensive, saying they’re the victim of false insurance claims.

“I think there are really bad public policy ramifications to what’s happening to BP,” the Times quoted Geoff Morrell, senior VP for communications and government affairs at BP America, as saying. “It’s not just bad for this company that illegitimate, dubious claims are being paid to the tune of hundreds of millions of dollars; it is bad for, dare I say, America.” It is also bad for, dare we say, BP’s PR

But does BP care how it looks anymore? Last month, the US government allowed BP to bid again for oil and gas leases in the gulf. And two weeks ago, BP officially ended active shoreline cleanup – and, apparently, the cleanup of their image.

THE PR VERDICT: “D” (PR Problematic) for BP. As much as they’d like to move on, those affected by the disaster haven’t.

THE PR TAKEAWAY: You can stop apologizing, but don’t stop repairing. Part of a company’s recovery from extreme damage is presentation of image. Okay, four years on, BP can stop apologizing. But portraying themselves as victims of insurance swindles? It’s more than moving on. It’s an insulting turnaround that, as PR tactics go, is a disaster in its own class.

 

PRV Report Card: This Week’s Winners & Losers

obamacare logo  PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to the Affordable Care Act, a.k.a. Obamacare, whose supporters, including its namesake, had reason to celebrate Monday when enrollments pushed slightly past the original sign-up target of 7 million. The nonpartisan Congressional Budget Office projected that target for initial sign-up period through March 31. Despite a horribly marred start and with withering opposition at every turn, the mandated healthcare program saw sign-ups somehow make their numbers. And while public opinion is still hardly enthusiastic, one poll did find for the first time that public support for the healthcare law surpassed opposition. Perhaps the rally will prompt lukewarm supporters to stop apologizing and start cheering.

  PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) to General Motors’ chief executive Mary Barra, for a defense statement best summed up by “I don’t know.” As the head of GM faced a House subcommittee investigating what the car company knew and when regarding flaws that led to numerous deaths and injuries, Barra’s responses infuriated senators and the families of the deceased alike. PR is in freefall, and GM is still recalling millions of cars and facing possible criminal charges. In leaving Barra to claim ignorance or hang herself and her company, GM’s legal and PR teams register a complete fail.

  PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to Britain’s Daily Mail and Daily Telegraph, whose editorial boards told a parliamentary science committee they believe humans are negatively impacting global climate conditions. Really? That’s rather confusing considering, as the committee chairman put it, “some papers regularly give a platform to lobby groups or indeed conspiracy theorists – many not even qualified scientists – who pooh-pooh the evidence and attack UK climate scientists.” We are shocked, shocked, to find out that publications, looking to increase readership, might take one view in their papers while believing the exact opposite. Yawn.

Shadow Over GM Recall Grows Longer

 Shadow Over GM Recall Grows Longer

THE PR VERDICT: “D” (PR Problematic) for GM.

The news from General Motors continues to get worse. Last month the carmaker began a worldwide recall of over one million of its vehicles, including the Chevrolet Cobalt and Saturn Ions, due to faulty ignition switches that resulted in 12 deaths. Then, a federal review of those GM vehicles dating from 2003 to 2012 found that faulty airbags were responsible for an astonishing 303 deaths.

Lawmakers are pressing for answers as to how long GM knew about the issues and what they did about them. GM’s answer has been to launch what chief executive Mary T. Barra calls an “unvarnished” investigation. Leading this investigation will be the law firm of King & Spalding – the same firm that had been defending GM in wrongful death lawsuits.

Conflict of interest? Whether it will be in reality or not isn’t really the question. The firm will have to do enough digging to preserve their reputation while still being able to call GM one of their main clients. But if anyone asked internal PR what this move would look like to the outside world, GM apparently ignored that information as well.

THE PR VERDICT: “D” (PR Problematic) for GM.

THE PR TAKEAWAY: Even in times of triage – perhaps especially so – appearances matter. When faced with a product issue that has resulted in death, companies must quickly go into damage control. The smartest take immediate measures to prevent further injury or loss of life, own up, and set their PR firms to work on image rebuild. In GM’s case that time is over. And ironically, the company’s goal – preserve the bottom line by presenting the image of taking action – can shoot itself in the foot with the implication of more coverups, this time by the company’s trusted law firm. It’s an action, but it’s hardly a strategy, and it may cause more damage than it controls.

Comcast Sells Mega-merger, Though Few Buy It

ComcastRoberts Comcast Sells Mega merger, Though Few Buy It

THE PR Verdict: “C” (Distinctly OK) for Comcast and CEO Brian Roberts.

Comcast CEO Brian Roberts had his work cut out for him last week trying to convince anyone that his company’s $45 billion purchase of cable rival Time Warner was a boon to anyone other than Comcast. Yet gamely he tried, and for that he and Comcast earn points for consistency.

The two parties spun the purchase as a “merger,” when in fact Comcast would be absorbing all of Time Warner – that is, if the transaction is approved by shareholders and regulators. Roberts called the deal “pro-consumer, pro-competitive, and strongly in the public interest.” Another Comcast exec took up the anti-monopoly argument by emphasizing that the two companies currently “do not compete in a single zip code in America.” Comcast also claimed the deal would benefit net neutrality, at least until current protections expire in 2018, and predicted regulatory approval.

Not surprisingly, few bought any of Comcast’s claims. A former FCC commissioner said the deal would “run roughshod over consumers.” One industry expert spelled out why the “pro-consumer” argument was “nonsense,” while another shot through the claim that cost-saving “synergies” Comcast predicted would ever make their way into consumers’ bills. And public advocacy groups called on the FCC and anti-trust authorities to block the purchase. Amid the pile-on, however, Comcast kept cool and did not stray from its script.

THE PR VERDICT: “C” (Distinctly OK) for Comcast and CEO Brian Roberts, for keeping their emperor fully clothed – appearances to the contrary.

THE PR TAKEAWAY: Stick to your story. The script Comcast used in announcing their deal stressed the same talking points over and over. Questions implying the contrary were deflected or ignored. With a controversial merger such as this, coming so soon after the apparent defeat of net neutrality, Comcast needs to win in the court of public opinion as much as that of the regulators. It’s hard to predict which will be the tougher fight, but the same arguments will carry in both theaters.

 

Obama Administration’s Epic Tech Fails

 Obama Administrations Epic Tech Fails

THE PR VERDICT: “F” (Full Fiasco) to the Obama administration’s technical advisors. (Pictured: NSA leaker Edward Snowden)

Earlier this week, President Obama had to call French President Francois Hollande and explain, if he could, why the US was spying on the phone records of over 70 million French citizens. The issue was brought to light by former US National Security Administration contractor Edward Snowden, who revealed NSA secrets to several news agencies months ago. Now more than ever, it is imperative that President Obama’s technical administration locate the fugitive tech expert. Not just to save face; they could actually use his help.

Aside from being unable to locate Snowden, a man of Bourne-movie level abilities to erase every trace of his movements, the Obama administration has lost credibility over the technical glitches on Healthcare.gov, the main portal to signing up for mandatory Obamacare. Yesterday, another gaffe: a Twitter feed that has been revealing embarrassing inside information about foreign policy for the past two years was traced back to Jofi Joseph, an official in the White House’s National Security Staff. #howembarrassing.

Americans have grown uncomfortably accustomed to government failures. A lack of regulations allowed the collapse of the economy. Bipartisanship led to a shutdown. Now the website to register for healthcare doesn’t work, prompting the president to record a video encouraging people to sign up “the old fashioned way,” via phone or in person. Presumably, this video was made around the time of the  call to the French president about the tech guy the CIA can’t find, and before the Twitter revelation.

THE PR VERDICT: “F” (Full Fiasco) to the Obama administration’s technical advisors.

THE PR TAKEAWAY: If you want to do your best, surround yourself with the best. America is not exactly short on technical excellence, yet the president’s cabinet signed off on using ten-year-old technology for Healthcare.gov. The military stands by the accuracy of its drones, yet the US can’t find one guy who’s talked to several major international newspapers, or another guy dissing the White House from inside the White House. The PR solution would be obtaining the best and the brightest to fix the glitches and increase security. Maybe Snowden could provide a reference.

Health Exchange Site Needs Intensive Care

Healthcare Exchanges Health Exchange Site Needs Intensive Care

THE PR VERDICT: “D” (PR Problematic) for Healthcare.gov’s rocky rollout.

Among the great gifts US Congressional Republicans gave to President Obama in their 16-day quixotic government shutdown was deep cover for the abysmal rollout of Healthcare.gov, the website where uninsured Americans can (and must) sign up for health insurance. The federal government site is the go-to for the 6-in-10 uninsured consumers who live in states that, for political reasons, refused to set up their own healthcare exchanges.

Regardless of where one stands on Obamacare, the rollout has been a slow-motion disaster plagued by technical glitches, politics, restrictive government contracting requirements – there’s a long list. And now that  the foundering ship of state has been righted and set back on course, attention is shifting to the implementation problems, and criticism is crossing party lines.

In remarks Monday, Obama hit the “no excuse” soundtrack for the technical problems and vowed a quick and substantive fix, but repairs could take weeks. The administration has highlighted the volume of site traffic (overwhelming) and successful registrations (respectable) but is still playing off its back foot amid rising calls for someone’s head – perhaps even that of Health and Human Services secretary Kathleen Sibelius. A quick fix is mandatory.

THE PR VERDICT: “D” (PR Problematic) to the Obama administration, for not responding fast or loud enough to address Obamacare’s web-based woes.

THE PR TAKEAWAY: Own the conversation on your product or service. Admirers of the nimble, shoot-and-move communications strategy of Obama’s presidential campaigns surely wish the same could be seen in how his administration has addressed the healthcare rollout glitches. Obama & Co. need to redirect the conversation. They’ve taken the first step with Obama’s “mad as hell” mea culpa. Now it’s time to find and promote successes, get ahead of the critics, provide a date for when things will be fixed – and prepare for someone to take the fall.  

 

Senator Cruz’s 21 Hours of Fame

 Senator Cruzs 21 Hours of Fame

The PR Verdict: “D” (PR Problematic) to Sen. Ted Cruz.

In the US, the “filibuster” is a tactic undertaken by senators to stall a vote on important legislation. In the hands of Texas Senator Ted Cruz (R-Texas), not only is a filibuster not a filibuster, it’s also an unwise PR move.

US Senate rules allow any senator to hold up the chamber’s agenda by expounding on any topic for as long as that senator can stand and speak. This week, Senator Cruz launched a 21-hour speech in the hopes of “de-funding” President Obama’s national health care reform law. The surprise? After ending his monologue, during which he read from Dr. Seuss’s Green Eggs and Ham and did Darth Vader impressions, he voted, along with the rest of the Senate, to move on.

To his PR credit, as a freshman representing the conservative Tea Party, Cruz has shaken things up in the typically rigid US Senate, but as many pundits pointed out, the “pseudobuster” was pointless because the law cannot be undone this way. Senate Republican leaders refused to endorse Cruz’s soliloquy against Obamacare and all that was left was the Senator’s dented credibility.

THE PR VERDICT:  “D” (PR Problematic) for Sen. Ted Cruz, who looked like he neither knew what he was getting into, nor how to get out of it.

THE PR TAKEAWAY: Changing mid gear looks foolish. As in most places, getting things done in the US Senate requires cooperation and ultimately Cruz will need GOP leaders’ help to be effective as a legislator and to get re-elected. Fine and well to make the headlines but even upstarts have to work within some kind of framework to be successful. No man is an island and for Cruz, he just learnt a PR lesson the hard way.

 

The PRV Report Card: This Week’s Winners & Losers

hersman 300x300 The PRV Report Card: This Week’s Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to Deborah Hersman, chairwoman of the National Transportation Safety Board, for maintaining the accident investigation agency’s impeccable record of transparency and candor. Led by Hersman, the agency has gushed a steady torrent of salient findings on last weekend’s deadly crash of Asiana Flight 214 in San Francisco, prompting journalists to express “amazement at the unusual amount of detail flowing from the federal bureaucracy.” Her daily briefings have not been universally welcome. Pilot groups have decried premature disclosure of data that suggest pilot error, while other critics have clucked about Hersman’s intense ambition as the driving factor for her high visibility. Maybe, but so what? As Hersman noted this week, the NTSB’s unassailable credibility derives from its transparency: “We believe it is important to show our work and to tell people what we are doing.”

 The PRV Report Card: This Week’s Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) to advertising mogul Charles Saatchi, who announced he is divorcing his wife, celebrity chef Nigella Lawson. The soon-to-be-ex Mrs. Saatchi was the one expected to start divorce proceedings photographs of Saatchi choking her during lunch at a restaurant hit the media. After minimizing his repeated attacks as “a playful tiff” to the press, Saatchi gave a statement saying he was “disappointed that [Lawson] was advised to make no public comment to explain that I…have never abused her in any way.” No doubt all who read it were not merely disappointed but frankly aghast that Saatchi was not advised to keep his mouth shut.

female force paula deen1 150x150 The PRV Report Card: This Week’s Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD TO Bluewater Productions, which said it will go ahead with a planned comic book featuring that legendary icon of female empowerment…erm, Paula Deen? Yes, the company said “Female Force: Paula Deen” will  hit the stands in October despite the celebrity chef’s plummeting stardom. Deen’s empire began to crumble after she admitted to using racial slurs, something she attributed to having grown up in the South. Bluewater said it chose Deen as its next superhero because she “changed Southern cooking for women” (meaning, now even more will develop diabetes?) and that it will somehow incorporate Deen’s fall from grace into the storyline – that should be interesting. Apparently, Bluewater doesn’t need its heroines’ consent to publish; the company admitted Deen hasn’t returned its calls. Given that corporate sponsors are dropping the 66-year-old chef like a hot butter-and-sour-cream-laden potato, however, that could change.

 

Edward Snowden Keeps His PR Cool

 Edward Snowden Keeps His PR Cool

THE PR VERDICT: “A” (PR Perfect) for Edward Snowden.

He’s an international hero, a whistleblower fighting the good fight against Big Brother! He’s a villain, a spy, a traitor exposing US secrets to those who would harm the nation! Whichever you believe, apparently Edward Snowden, the 29-year-old former technical assistant for the CIA who has been exposing intelligence gathering secrets for the US National Security Agency, isn’t embracing any role that the media, government officials, or his supporters are creating for him. “I don’t want the story to be about me,” Snowden has said. “My sole motive is to inform the public as to that which is done in their name and that which is done against them.”

The media frenzy about Snowden, and whether he’s good or evil, has been fueled by no shortage of people willing to pick sides. Even Snowden’s own father appeared on Fox News asking his son to stop leaking sensitive information about the government’s spying practices.

Yet, despite his nearly folkloric status, as well as the US’s embarrassment at not being able to find him, Snowden hasn’t taken any opportunity to boast to his supporters or to taunt his detractors. His contact with the media has been limited to staying on-brand with a simple message: I am not a traitor and I am not a hero.

THE PR VERDICT: “A” (PR Perfect) for Edward Snowden, holding PR steady in a media environment that wants him to take sides.

THE PR TAKEAWAY: Stay true to your message. When that message is volatile, don’t get bogged down in public, or political, opinion. Ideas about what Snowden is doing vary wildly, and he’s had every opportunity to get lost in that spaghetti sauce – which would only dilute his message. By standing firm on his purpose, Snowden’s motives stay unquestioned sans vainglory.  That’s one secret definitely worth sharing.