It's a wonderful time to be a student in the Free College of
High-Profile Litigation PR. The first-day opening remarks might go
something like this:
What do Enron, WorldCom and Global Crossing have in common?
All three have made regrettable PR blunders, and all three have
done some things right. Each of the three has also labored in the
court of public opinion with sufficiently idiosyncratic strategies
to make the contrasts between them as instructive as any glib
comparison.
What Were They Thinking?
Enron mastered "look down and say nothing" techniques too often
employed with an eye toward minimizing legal exposure and
containing damage, a method of crisis containment often espoused by
lawyers. There's no question that this approach may be legally
advisable. It generally does nothing, however, for your client's
public image.
And who will ever forget the image of Kenneth Lay's wife, Linda,
earnestly declaring on NBC's "Today" show that she and her husband
were "bankrupt," and insinuating that the Lays were on equal
financial footing with Enron's suddenly penniless employees? Had
Mrs. Lay forgotten that she and her husband still owned a Houston
penthouse, property in Aspen and other holdings?
By contrast, Global Crossing Chairman Gary Winnick attempted to
appear magnanimous, but was only partially successful. His offer to
give $25 million of his own money to employees who had lost
everything was perceived by many to be PR grandstanding, as the $25
million was a drop in the ocean of the $734 million Mr. Winnick
acquired before the company folded.
Still, it was more than words. It was an act against his own
financial interest - the most credible form of communication is to
act against one's own interest. Message: "I care."
There is no "I" in Team
A key lesson in how not to conduct crisis PR management is to
let your players run in circles making decisions about who's
talking, who's not talking, and what folks will say or won't say.
As their attorney, you must render counsel here that is informed by
both a legal and business perspective. That business perspective
always involves public perception.
Enron figures Lay and Skilling took different paths, reinforcing
the rudderless ship characterization of post-crash Enron. Skilling
decided to talk, which opened him up to a legal minefield, but
allowed him to be portrayed as a cooperative broker in the
investigation. Lay invoked the Fifth Amendment, which reduced his
exposure legally, but promoted peoples' perception that he was
protecting himself to the detriment of the company and its hapless
employees.
Through the Fog, Some PR Successes
Even Enron and Global Crossing, for all of their public
relations errors, did some things right. WorldCom, of the three,
did the arguably best job of PR, and in so doing, may have come out
of its accounting scandal the least damaged.
New CEO, Michael Capellas, brought in the global PR firm Hill
& Knowlton, with which he had worked while CEO of Compaq.
WorldCom came out swinging with a two-pronged message: 1) yes, we
messed up, and messed up badly, and 2) punish us however is
appropriate, but we're too important to shut down.
Capellas reminded the public - and Congress - that the company
controls virtually all of the country's telephone lines, including
those running into and out of the Pentagon. So, while it didn't
exactly come out smelling like a rose, the public has not demanded
that the company be shuttered; there is too much to lose.
Global Crossing has acknowledged the nature and scope of the
problem. While it isn't releasing much information, at least it's
telling us why: "Possible conflict of interest matters are being
thoroughly investigated by the special committee of Global
Crossing's board of directors, with the assistance of independent
counsel. Prior to the completion of that process, it would be
premature to comment."
Moving Forward
All three companies are re-branding in their efforts to survive
- even flourish - in the future.
Global Crossing completed a purchase agreement with Singapore
Technologies Telemedia, enabling it to emerge from bankruptcy in
December 2003.
WorldCom will emerge soon, reverting back to a previous,
less-besmirched name, MCI. (A shrewd PR move and one that Martha
Stewart Omnimedia will soon need to consider.)
Enron plans to emerge as two, yet unnamed entities in the spring
of 2004.
And so, class, during our study of these three fallen and maybe
resurrectable giants of industry, we have learned that preparing
for a crisis before any hint of a problem is key to surviving a
self-generated scandal, that actions taken to preserve legal
standing may not be in a company's best PR interest, and that
"maybe if we ignore it, it will go away," is perhaps the worst
corporate lesson to live by.
The best thing you can do for your clients, in addition to
brilliant legal advice, is to be sure they do not become media
examples for the next semester.
By Richard S. Levick ,Esq., [email protected]. Levick is
President of Levick Strategic Communications, which has directed
the media for more than 150 law firms worldwide and handled
high-profile litigation, including the Catholic Church and Rosie
O'Donnell. Lissa Hurwitz [email protected] contributed to
this article.