Hill and Knowlton could have cooked up even more controversy for its PR client International Olympic Committee (IOC) in vying to win the PR account for the Olympic bid city Toronto. But the two parties set some ground rules to avoid a conflict of interest.
H&K was one of a handful of PR agencies which last week pitched the city about representing it for the 2008 games. But executives at both the IOC and H&K say they aren't bothered by H&K seeking Toronto's favor even though the Canadian capital will court the IOC to host games in the new millennium.
Executives at the IOC and H&K told PR NEWS last week that the contract IOC entered into with H&K has a clause calling for separate account teams should H&K secure Toronto's business. Aware that H&K could end up being Toronto's gold-medal PR choice, IOC's arrangement with H&K was meant to avoid a potential conflict of interest.
The clause grew out of conversations H&K strategists had with the IOC before the deal was closed early this year.
For PR executives, it's a lesson that should ring of timely caution: It's wise to brainstorm potential ethical or conflict-of-interest debates when you take on a high-profile client. While H&K and the IOC weren't able to barricade themselves from queries, they claim they were able to report that they had already addressed and dealt with the issue.
IOC Meets H&K
The International Olympic Committee hired PR agency Hill and Knowlton in January to help it rebound from its most damaging crisis ever. But it wasn't until recently that the two found themselves answering questions about H&K pitching Toronto organizers who are orchestrating the city's bid.
"[Should H&K be chosen], there would be watertight separation," said IOC Director of Marketing Michael Payne. He is one of about 100 IOC employees based at its headquarters in Lausanne, Switzerland.
The IOC only has several in-house communicators and turned to H&K for help in determining its crisis response, messages and strategies as well as help in juggling the logistics required to handle the media frenzy the crisis has spurred.
For instance, H&K helped ready the IOC for the Jan. 24, 1999, press conference in which the IOC announced that IOC President Juan Antonio Samaranch established an ad hoc commission to investigate claims of improper conduct. H&K staffers also helped field press concerns before, during and after the announcement.
H&K continues to inch closer to rivals Edelman and Burson-Marsteller when it comes to international PR. H&K scored a heady dose of recognition last year after it successfully helped Swissair handle the PR surrounding its crash, including responding to legions of journalists.
But the IOC strife has created what is expected to be a much longer-running crisis, with expectations that the fallout will stretch to the 2000 games in Sydney. The IOC won't reveal what it's paying H&K other than saying it's under $1 million.
Between five and 10 people handle the account out of H&K's London, Sydney, Los Angeles and New York offices. These point people, Payne adds, speak "hourly" with IOC executives. Key liaisons include Mari Hope, managing director of media relations for H&K in New York.
The Media Scene
Payne says an average of about 600 journalists have attended recent press conferences dealing with the IOC corruption inquiry, which continues to have all the making of high drama: alleged bribery, an international angle, municipalities vying against one another for coveted business, and alleged crooked officials.
This latest wrinkle - H&K's quest to work for Toronto - is just a drop in the bucket, albeit one that has received some press attention. The Wall Street Journal did run a story about whether H&K's Toronto bid was a conflict.
"There are not a lot of international communications firms which could do this work for us. The point was that historically, major PR agencies have done work with bid cities and we knew with whichever firm we selected, there was the possibility they would have aspirations to work with a bid city or had worked with one previously," IOC's Payne said. Ketchum, for instance, represented the city of Atlanta in 1996.
Nonetheless, the IOC/H&K case is proof that the appearance of a conflict of interest counts for a lot in an era when criticism is easily and quickly flung. Realizing that, H&K and the IOC sought to forecast and prepare for concerns that might arise should news hit that its Toronto office is seeking to work with the Canadian bid city.
H&K's Toronto office has not been told how long it will take the city to decide which PR firm it selects, according to Carole Kerbel, GM/executive VP of H&K/Toronto.
Around the end of 1998, according to H&K Executive VP Ron Hartwig, H&K principals surmised that its Canadian PR arm would want to vie for the Toronto account. Later, after entering into negotiations with the IOC, it broached that possibility and the IOC decided to build the clause into the contract to avoid a conflict of interest.
(Hartwig, 323/966-5718; IOC, 011/41-21-621-6111)
Hill and Knowlton is one of several PR agencies being considered to help Toronto stage the 2008 games, with other contenders including Edelman PR and APCO Associates. And Toronto is just one of several bid cities. Others include Paris, Beijing, Kuala Lumpar (Malaysia), Istanbul (Turkey) and Cairo.