Mainstream media, the tech trades, and the blogosphere are agog covering the story of Burson-Marsteller’s (BM) clandestine anti-Google media pitches on behalf of undisclosed client Facebook, but I’m guessing BM’s John Mercurio still doesn’t get the fuss.
During his earlier career as a political reporter, he no doubt frequently found himself on the receiving end of “you-didn’t-hear-it-from-me-but” calls from politicians, candidates, aides, lobbyists, and the like looking to plant stories that would smear the opposition. So when he jumped to the other side and entered the PR world by joining Burson-Marsteller, that’s the playbook he brought with him.
Mercurio and his colleague Jim Goldman, another newly hooked BM employee fished from the journalism sea (Goldman is a former CNBC reporter), soon learned that what works in the political world doesn’t necessarily translate to the business sector, particularly when public – or soon to be public — companies are involved. There are simply too many constituencies with a real vested interest — investors, employees, customers, analysts, vendors, and regulators, to name a few — for the usual chicanery of politics to prevail. If Mercurio and Goldman didn’t know that when they set out on their secret mission to raise privacy concerns about Google’s Social Circle, my guess is they do now.
The media’s outrage to date has focused primarily on Facebook’s hypocrisy for secretly trying to point a damning finger at Google given its own track record with user privacy transgressions. Despite founder Mark Zuckerberg’s claims that he’s all about transparency, the company is reportedly close to signing a consent decree with the Federal Trade Commission for its repeated violations. With the Burson stunt, Facebook was clearly trying to end their ignoble reign as poster child for online privacy violators by dragging Google up to the podium with them.
Despite the industry’s professional code of ethics requiring PR practitioners to reveal sponsors for represented causes and interests, it shouldn’t come as too great a surprise that Burson-Marsteller chose to violate it. While the company insists that Mercurio and Goldman breached the firm’s ethical guidelines, BM got caught doing pretty much the same thing for Microsoft two years ago with respect to Google’s planned acquisition of DoubleClick. Having a code of ethics is the easy part; expecting employees to adhere to it is something entirely different. After all, even Enron likely had a well-written code of ethics in its new employee onboarding package.
The issue of bigger concern is the inevitable adverse consequences when people from the world of politics infiltrate senior corporate communications positions, or in the case of Facebook and Burson-Marsteller, are allowed to run entire companies. Facebook COO Sheryl Sandberg, whose responsibilities include overseeing communications, is a former Treasury Department Chief of Staff in the Clinton Administration. Elliot Schrage, vice president of communications, marketing, and public policy, also is a political veteran. Mark Penn, Burson’s CEO, was a close aide in the presidential campaigns of both Bill and Hillary Clinton.
“Reputation management” has a very different meaning in politics. It’s about swaying public opinion by any means necessary. Politicos and lobbyists spin and leak stories, and political reporters lap it up and keep score. The effectiveness of this constant spinning is measured in news cycles; if you are featured positively in more news cycles than not, you’re ahead. Is it any wonder that Congress and the media are routinely ranked as America’s least trusted institutions?
Accordingly, individuals steeped in politics instinctively see nothing untoward about anonymously casting doubt on a rival. I believe BM’s claim that it was Facebook that insisted it not be identified as the sponsor of the campaign against Google, but I’m highly doubtful that Sandberg and Schrage weren’t a party to the decision.
Moreover, the very cynical side of me suspects that, despite the negative press, Penn, and perhaps Sandberg and Schrage, view BM’s whisper campaign as a huge success. Yes, the disclosure that Facebook was behind the campaign is somewhat of an embarrassment but the fundamental message points have been well reported.
Sadly, the Facebook-BM-Google debacle isn’t an isolated incident of a dubious corporate PR campaign being run by a former politico. Leslie Dach, who held various positions in the Clinton Administration, was the architect of the “Wal-Marting Across America” blog. It was positioned as being penned by a couple of genuine pro-Walmart customer enthusiasts, but was really an initiative of Walmart’s PR firm. That ill-advised campaign ranks among the biggest PR blunders by a major consumer corporation. Dach launched the campaign while working at Edelman, but he’s now Walmart’s executive vice president for corporate affairs. (For more on Dach and his corporate communications activities, read this damning profile in The New Yorker.)
The financial services sector is now turning to politcos for its communications counsel. Citibank recently hired Ed Skylar, a former aide to Mayor Mike Bloomberg, as its head of public affairs, and Goldman Sachs last year retained Clinton aide Mark “Master of the Disaster” Fabiani to help clean up its image. John Thain, CEO of CIT and the former head of the NYSE, has relied on former state department spokeswoman Margaret Tutwiler for his communications counsel for several years.
All of these companies are in some sort of trouble, whether it be financial, competitive, or reputational. It will be interesting to see the tactics the tactics these companies use to turn themselves around.