Being a Libor-Tease with the New York Times

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The PR Verdict: “D” (It’s a Dud) for the Department of Justice.

Don’t you hate a tease? The New York Times set the tone for this week’s Libor coverage with its weekend story that the Justice Department (and other regulators) is thinking about filing criminal charges against banks and individuals involved in Liborgate. “It’s hard to imagine a bigger case than Libor,” said one of the unnamed government officials. Golly! What’s next?

The news presumably sent a chill through banks and their senior management. We all know what happens when a firm faces criminal indictments: If true, things could get very ugly, and it’s normally over in a matter of hours. Just talk to Enron’s former auditors Arthur Andersen.

The Times article reported that the DoJ is building its case, though they hedged by saying this could take time. But since publication two days ago, the Libor waters have been further muddied. Did the Bank of England knowingly overlook rate fixing? And what did the US Federal Reserve know? Talking about a criminal prosecution, even unofficially to The New York Times, might have been a little premature. The facts are not so simple and there is enough blame to go around, including even possibly some regulators. In the end, the Justice Department may not be able to prosecute. That’s one story that won’t help the weakened PR image of law enforcement.

The PR Verdict:  “D” (It’s a Dud) for the Department of Justice. This might do more PR damage than good, if not followed through.

The PR Takeaway: Crying wolf messes with your PR. With a public increasingly incredulous that no big name is behind bars following the financial crisis, there is certainly PR mileage in saying”This time around, someone is going to stand trial.” But unless it’s a certainty, this is one headline that should have been delayed until a criminal prosecution was given the all clear. A disgruntled public, suspicious of the cozy relationship between regulators and Wall Street, might find yet again that hefty fines and civil charges are they only penatlies ultimately on offer. Failing to press charges won’t help the PR image of independent enforcement and regulation. Next time, why not pause before making the splashy unofficial announcement?

Is the Department of Justice being a big Libor-tease? Give us your PR Verdict!

Bob Diamond: Was It Something I Said?

BobDiamondresignation 300x194 Bob Diamond: Was It Something I Said?

The PR Verdict:”F” (Full Fiasco) for Bob Diamond, resigning CEO of Barclays.

One down and another just gone. Monday morning saw the resignation of Barclays Chairman Marcus Agius, following news of the Libor rate scandal. “The buck stops here” Agius said.  Exit stage right.  Oddly enough, his number two, CEO Bob Diamond, remained standing. By Tuesday, Diamond’s resignation had been accepted.

Up until then, Diamond apparently felt the buck didn’t really stop with him. While suitably contrite, with public apologies and regrets that made it clear that rate fixing failed to meet Barclays’ standards, there was no hint of a resignation. Hell no! Dismissing any suggestion that he was about to lose his position, Diamond told the media he wasn’t going anywhere. Two days later, he was out of a job.

Diamond’s headstrong comments over the weekend pushed forward the likelihood of a resignation. After all, if the Chairman had resigned, why didn’t the CEO, who is in charge of day-to-day business? Given that Diamond has previously fought PR clouds over his compensation and autocratic style, this unlucky third strike was bound to have him preparing the cardboard box for his belongings.

The PR Verdict: “F” (Full Fiasco) for Bob Diamond. Telling the media and staff he had no intention of leaving his post wasn’t his call. An oddly cavalier declaration when his Chairman had decided to take his public lumps.

PR Takeaway: Is it the role of a CEO to decide if he should keep his job or not?  Remember, each person is only a guest in his or her position, and the invitation can be pulled at any time. Better to have deferred the issue to the Board and say that the matter of continued service was a decision for them. Diamond unwittingly gave everyone from the UK Prime Minister on down the opportunity to cry foul. With little incentive for powerful stakeholders to come out in support of Diamond’s tenure, his remaining days were nothing more than a countdown to the inevitable.

Should Agius and Diamond have resigned simultaneously? Would that have been the better PR tactic? Give us your PR Verdict below.

We will be back July 5 with a new PRV. Happy July 4 to all our readers