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.

Walmart Chooses to Show Face Rather Than Lose It

 Walmart Chooses to Show Face Rather Than Lose It

The PR Verdict: “C” (Distinctly OK) for Walmart showing face.

Thanksgiving in America is a celebration of abundance, but not so for workers at Walmart. Just before the holiday break, petition group MoveOn.Org released a statement about Walmart  setting up a food drive to feed the hungry on Thanksgiving – not for the homeless or a charity bank but for their own workers.

A long-known fact that minimum wage is not a living wage has received special attention in the past year. McDonald’s employee budget sheet would have been laughable had the need for it not been so dire. Employees of fast food restaurants and retail stores are barely able to pay bills, buy food, clothe their families.

Yesterday, TV news magazine CBS Sunday Morning did a segment on “Fight for 15,” a campaign to raise minimum wage to at least $15 (the federal minimum wage starts at $7.25 and is adjusted at the state level). The report noted that “of all the corporations Sunday Morning reached out to, Walmart was the only one that would provide an interview.” While David Tovar, Walmart’s VP of Communications, was only quoted as saying that they “don’t want people to stay in entry-level jobs very long,” the fact that the demonized company allowed an interview was a bold move indeed.

THE PR VERDICT: “C” (Distinctly OK) to Walmart for showing face toward an ugly accusation.

THE PR TAKEAWAY: Silence is not always golden.”Guilty as charged” is the only conclusion the public can, and will, draw from a corporation that turns down a request for interview. Given the way the Sunday Morning segment was edited whether direct questions weren’t asked or weren’t answered is unclear but Walmart main PR point was made: Walmart creates jobs. Not the entire story, to be sure, but the PR task at hand was to remove the demon mask from the corporation. Keep the good face on and there may be reason for all to give thanks.

Royal Baby Gives Royal Boost to UK

royal baby 150x150 Royal Baby Gives Royal Boost to UK

The PR Verdict: “A” (PR Perfect) for the new prince’s effect on UK economy.

Economy ailing? Country need a financial boost? Just get your beloved monarchs to give birth to a future king. That’s exactly what Prince William and the Duchess of Cambridge did for the United Kingdom when a new prince was born.

Though at press time the baby was still unnamed, the financial figures from the birth of His Royal Highness were already in. The Center for Retail Research estimated that Royal Baby Watchers would spend upward of $420 million in celebration over the birth of the third in line for the throne. There was a boost in visitors to London, not least of which from the media, camped out for weeks to get shots of the royal trip to the hospital and the first photos of the future queen or, as it turned out, king. Commemorative merchandise was for sale, along with donuts iced with baby footprints, and, of course, a lot of alcohol for toasting.

This boost in economy is yet another part of the re-branding, if you will, of the monarchy. In the past, Britain’s royals have struggled with scandal, but recently that has changed. William bucked Buckingham to marry his choice and when Kate was caught topless by paparazzi, the verdict was shame on the magazines that ran the snaps. Now, a baby brings glad tidings during an ongoing worldwide recession. The royals are on a roll.

THE PR VERDICT: “A” (PR Perfect) for William, Kate, and the UK’s warm, PR-savvy welcome to the royal baby.

THE PR TAKEAWAY: Accentuate the positive. In a time of a struggling economy, good news – from any source – is always welcome. The British Royals have always grabbed the headlines, occasionally like some sort of reality show meets romance novel. William and Kate are playing their PR cards well. It’s called making hay while the son – sorry! – shines.

Austere Today, Gone Tomorrow?

 Austere Today, Gone Tomorrow?

THE PR VERDICT: “F” (Full Fiasco) for the proponents of austerity, who continue to lose a losing battle.

What now for the proponents of austerity? Up until last month it seemed they had won the policy and PR debate. With disciples across Europe and the US, and with Angela Merkel as its high priestess, fiscal restraint was positioned as a dose of much needed tough medicine. The mantra was clear; no pain, no gain. Politically unassailable, this was one helluva PR launch with some influential backers. Over the last month, however, things have become a little more complicated: austerity may have lost its PR claim as a cure all.

Last week, economists at the University of Massachusetts reviewed calculations cited in Growth In a Time of Austerity, the bible for those justifying tightened fiscal policy, as flawed. The claim? The research published in January 2010 by Harvard University included “selective exclusion of available data and unconventional weighting of summary statistics.” The case for austerity is now not so clear.

Since then, austerity seems to be losing more and more PR steam. EU nations are sliding deeper into recession, with unemployment in Spain and Greece topping 30 percent. In Britain, austerity is responsible for a limp 0.3 percent growth, while Germany, the champion of austerity, is teetering on the edge of recession. Has austerity fallen out of fashion? The headlines would seem to suggest that less has not added up to more.

THE PR VERDICT: “F” (Full Fiasco) for the proponents of austerity, who continue to lose  a losing battle.

THE PR TAKEAWAY: Product launches can teach us something about ideological launches. If austerity was a consumer product, it would now be sitting on the supermarket shelves unloved and unwanted. Why? Because not one of its proponents have been able to demonstrate tangible benefits. Despite a big and loud launch, its advocates seem to be retreating into the shadows. Where are the business leaders confirming they are hiring in the face of cutbacks? Without some simple proof points and enthusiastic advocates, this is one launch that might have seen its brief vogue run right out of steam and into the dustbins of economic history.

 

Italy’s Five Star Movement Wins; Now What?

 Italys Five Star Movement Wins; Now What?

THE PR VERDICT: “D” (PR Problematic) for Italy’s Beppe Grillo.

What happens when the anti-establishment becomes part of the establishment? That’s the question Italians are asking themselves as an overwhelming 25 percent voted for the grassroots Five Star Movement (M5S) last weekend. A party of “political outsiders,” its elected parliamentary representatives define themselves by everything typical parliamentarians are not – at least, not in Italy. Namely? Young and honest.

In only three years, M5S has become a political steamroller. Without deep financial pockets, momentum has come from tireless rants and the pungent humor of the party’s leader Beppe Grillo. A former comedian, he amassed political capital with his unmatched rhetoric, winning the hearts and minds of disgruntled Italians who continue to despair at their deeply dysfunctional political system. His main achievement seems to be giving ordinary Italians a chance to vent their frustration and rage peacefully.

Now, poor Beppe is caught in a classic communications dilemma. Remaining true to brand means categorically refusing alliances with any established political force and continuing to win the crowds by criticizing established politicians and cracking jokes. The “outsider approach” might win votes, but it won’t help the country out of a dire economic crisis. With the “Grillo” brand being the anthesisis of sober statesmanship, it might be time for his M5S to think about a rebrand for the party and its leader.

THE PR VERDICT: “D” (PR Problematic) for Beppe Grillo. A different style (and a different spokesperson) may be what is needed.

THE PR TAKEAWAY: Brand evolution changes with circumstances. Grillo’s stated goal was to give Italian citizens the power to change their own country, but everyone understands this is a long haul – and an unpopular journey. While Grillo did not run for office himself, his M5S has won a seat at the table. With doubts persisting about the party’s ability to effect any real change, the best way to reassure their supporters is to take on the mantle of serious politicians promising to get things done. Coming across as rebels, comics, victims, or dreamers won’t cut it any longer, but speaking in a different tone and style will. Less jokes and rage and more substance will transition the party (and its leader) into the power role they have been handed. Beppe Grillo, as the leader and spokesperson, might want to start the change from the top.

 

Citigroup’s Doublespeak

 Citigroups Doublespeak

The PR Verdict: “D” (PR Problematic) for Citigroup.

Dear Reader: Can we interest you in a “repositioning action”? How about something to “further reduce expenses and improve efficiency”? These were among the phrases heralding Citigroup’s announcement late last week of a major recalibration of its businesses. More interesting than the news itself was the press release; obviously passed around for management’s input prior to release, the result was two-pages of corporate doublespeak.

The message should have been simple enough: Having lagged behind its peers in recovering from the financial crisis, Citi announced it was cutting 11,000 jobs worldwide – about 4 percent of its staff – to save as much as $1.1 billion a year in expenses. Where was that crucial number regarding layoffs in the release? Buried way down in the main body of the text; the last sentence of the third paragraph read, “These actions will result in a reduction of more than 11,000 positions.” If you blinked, or were still flummoxed by the previous paragraphs of corporatespeak, you missed it.

The first three paragraphs of the Citi release are required reading for any PR. They serve as timely reminder about what happens when a simple idea is worked over and over (and over). One can assume that every conceivable stakeholder at Citi was asked to provide business input and red pen edits. The result? A longwinded press release, easily held up to ridicule. Sometimes, it might be easier to let the PR people do the talking.

The PR Verdict: “D” (PR Problematic) for Citigroup. Orwellian business-speak is trying.

The PR Takeaway: Lead with the news. It’s a simple rule of PR that’s often overlooked.  The press release announcing the “repositioning actions” (…?) secured global media coverage with the headline “Citi Announces 11K Layoffs.” When you don’t say what you mean and try to bury the lead in doublespeak, the media will make the announcement for you – in an ugly way. Next time, encourage the boardroom to keep its red marker pens to itself and let the PR people do the the job they were hired to do.

To read the release, click here.

In Greece, Everything Elder is New Again

 In Greece, Everything Elder is New Again

The PR Verdict: “B” (Good Show) for the Elder Paisios legacy.

What becomes a legend most? Rasputin and Nostradamus both became celebrity doomsayers, but for the student of myth making, are there any present day examples? Enter Elder Paisios, a Greek monk who died in his homeland in 1994. According to the Wall Street Journal, he developed a cult following for his divinations and visions that allegedly predicted the current financial upheaval in Greece. Now everyone wants to know what else Elder Paisios envisioned.

Paisios spent most of his adult life  as a hermit on Mount Athos, spiritual homeland to the Greek Orthodox church. His fame spread when tales of his miracles and predictions circulated in the media as pundits searched for an explanation for the recent  economic fallout. The mystic had previously predicted that Greece would experience “great disruption and confusion, followed by hunger and political turmoil.” As Greeks endure the current crisis, they are now poring over Paisios’s other predictions. Some make puzzling reading; Greece will ultimately prevail over Turkey, Greece will partition part of Albania, and the world is secretly run by a cabal of five?

Yet Greeks are entranced by this man, whose grave has now become a shrine. Even a military officer was quoted in the WSJ as saying, “Paisios predicted many things, and his prophecies are now coming true.” A Facebook page making fun of him and his writings was taken down after vociferous protests and condemned in Parliament. Paisios has captured the public imagination, but like all mystics, his words are a matter of interpretation.

The PR Verdict: “B” (Good Show) for the Paisios legacy. There is a PR lesson to be learned from his enduring popularity.

The PR Takeaway: Mystery and silence make a reputation. Despite over 350,000 copies of a biography sold on Elder Paisios’s life, little is known about him. Born in 1924, Paisios was small man with an emaciated frame (not surprisingly, there is also an Elder Paisios diet book) sporting a black robe and long beard, rather like Rasputin and Nostradamus. In the age of social media where no detail is spared, creating a myth out of spare writings and a striking iconic appearance gives PR students a second take on how to create a legend. Sometimes less really is more.

To read more, click here.

Walmart’s Un-Happy Thanksgiving

73248406 150x150 Walmarts Un Happy Thanksgiving

The PR Verdict: “D” (PR Problematic) for Walmart.

Ah, Thanksgiving, the holiday when American families gather together over a meal, express gratitude, spend time together… And then start their holiday shopping at 8 pm, right after dinner, Aunt Mabel visiting from Boise be damned.

At least, that’s what Walmart and other major retailers are hoping will happen when it makes the unprecedented move of opening its doors to shoppers on Thanksgiving night. Store workers will have to arrive hours before opening time, thereby putting a serious dent in their holiday.

A strike at Walmart is now planned on Black Friday, the nation’s biggest retail day. Workers are fed up, claiming ongoing retaliation for speaking out for better pay, fair schedules and affordable health care. A Walmart spokesman answered, “The super majority of our 1.3 million associates are excited about Black Friday and are ready to serve our customers.” Ironically, Walmart failed to secure an injunction agains the union and the strike.  The earliest it could get one is Thursday, the national holiday, when courts are closed.

The PR Verdict: “D” (PR Problematic) for Walmart. Their decision to start Black Friday so early on Thanksgiving Thursday plays right back into its ongoing PR problem of being one of the country’s meanest employers.

The PR Takeaway: Thanksgiving begins at home. Walmart has had persistent PR problems when it comes to employee relations. As one of the nation’s largest employers it has been routinely been characterised (fairly or unfairly) as the employer who scrimps on benefits and pays a barely living wage. Walmart’s PR answer has been to focus on its role in the community including Working Families for Wal-Mart, a nonprofit organization funded by the retail giant to combat criticism of the company. But with this move it will be hard to take seriously its pledged commitment  to helping families and local communities. RIP, Thanksgiving; hello, Dark Thursday.

To read more, click here.

Note: The PRV returns on Monday. Happy Thanksgiving to our readers!

World’s Richest Woman with Poorest PR:

 Worlds Richest Woman with Poorest PR:

The PR Verdict: “F” (Full Fiasco) for Gina Rinehart and her PR image.

What are the PR rules for the richest woman in the world? Gina Rinehart, who recently topped the list, is an Australian-based heiress whose father started the original family fortune in mining. She inherited the fortune, grew it rapaciously on the back of the long-running commodities boom, and now has pride of place as one of a handful of  “self-made women” who get to opine on all matters economic.

Rinehart created a fuss recently when she gave her prescription for creating wealth. Her simple advice? Stop complaining. If you don’t like your current situation, just get back to work. Besides, if you have financial problems, you probably ate and drank your wealth away. Get serious, prescribes the generously proportioned Rinehart, who doesn’t look particularly abstemious herself. Listen to mommy!

She created a news sensation when she told a recent mining conference that mine workers’ salaries in Australia and other advanced economies are too high. Why, in Africa, you can pay people $2 a day! The speech created an internet furore and untold sniping blogs.

The PR Verdict: “F” (Full Fiasco) for Gina Rinehart and her PR image. If she keeps this up, no political allies will see any advantage in being public friends with her.

The PR Takeaway: Giving people a reason to like you makes it easier to enlist them in your cause. Rinehart seems to have a tough time getting along with people; her ugly financial disputes with her children are well documented. Having inherited such a large fortune, it’s hard to take her pronouncements on being self-made seriously. Telling others to take drastic pay cuts or accept a lower standard of living is guaranteed to backfire. Speaking your mind is one thing, but to drive a public policy agenda, Rinehart might find it more productive to be in listening, rather than telling, mode. The choice is clear: She can be a successful entrepreneur or the Cruella de Vil of capitalism.

To read more about Gina Rinehart, click here.

What might Gina Rinehart do differently to change her PR status? Give us your PR Verdict!