Karen's Blog

How the demise of a PR giant brought the industry into disrepute

I've been working in PR for the past 20 years and I'm amazed that for a profession whose primary task is to manage, enhance and protect reputations, the PR industry has never quite managed to do this for its own reputation, with practitioners labelled as spin-doctors and likened to lawyers who'll take on any case that pays.

PR differs from Law in several ways, though. The law profession is heavily regulated and you have to have at least a degree in Law to become a lawyer, whereas the PR industry is not regulated and anyone can set themselves up as a PR practitioner without any experience or qualifications.

Currently, the PR industry faces its biggest scandal ever and it all happened when the storyteller – UK PR giant Bell Pottinger (BP) valued at up to £40 million – became the subject of the story and stands accused of whipping up racial hatred in South Africa with its campaign that was supposed to highlight economic inequality in the country.

The Background

The 30-year old agency – founded by Lord Bell who advised Margaret Thatcher – has always sailed close to the wind taking on 'difficult' clients. In South Africa the agency has also represented former South African President FW de Klerk and the athlete Oscar Pistorious after he was accused of murder. Elsewhere in the world, Bell Pottinger has represented the governments of Bahrain and Egypt. The agency also represented Trafigura who was involved in dumping waste on the Cote D'Ivoire, and it has also 'helped' other unsavoury customers.

BP agreed to represent the infamous billionaire Gupta family, which is no stranger to scandals being friends with South African President Jacob Zuma and his son Duduzane Zuma. Duduzane, on behalf of the Gupta's Oakbay Investments is said to have brokered the BP contract.

The Gupta family is known for using its political connections to influence cabinet appointments and the issuing of state contracts. Four of South Africa's largest banks have closed the accounts the Gupta family held with them following scandals.

The Campaign

It all started in March 2016 – and ran for just more than a year – when BP took on a £100,000/month contract to represent the Gupta's Oakbay Investments in South Africa. It's claimed that in reality the brief was to focus was on repairing and protecting the family's wider reputation and portfolio of assets. Many say this was to deflect away from the attention being drawn to the Gupta's relationship with South African President Jacob Zuma and his son Duduzane.

Central to the campaign, spearheaded by BP's Financial Partner Victoria Geoghegan, was the idea that white-owned businesses are the enemy of South Africa and are the term 'white monopoly capital' was spread far and wide resulting in claims from the South African media that the campaign, which ran for just over a year, devastating progress for South Africa's efforts in post-democratic race relations, according to South African media reports.

The target audience was wealthy, white individuals and companies and critics of the campaign were accused of being in the pockets of wealthy whites, particularly the Rupert family. Two other key messages were that the State of Capture report was useless and rubbish, that the media and Thuli Madonsela were captured and biased.

BP allegedly used black-op style tactics. Some say the campaign was a secret. It involved about 106 fake social media profiles and fake news.

It is claimed that some of BP's management was against the Gupta campaign but that former BP CEO James Henderson, who has recently quit, and Geoghegan were more concerned about the hefty monthly fees at a time the agency needed money. It appears they didn't care about the consequences.

The results

The campaign has failed miserably. Instead of repairing and protecting the Gupta family's reputation and assets it's shown them in a worse light than ever.

Another result is growing racial hatred and a scandal that the PR industry will debate forever, raising questions about ethics, transparency and commercial confidentiality.

Henderson after issuing a weak apology and denying knowledge and wrongdoing has been forced to quit and the PRCA has expelled BP for five years saying, after investigation, that the agency broke four clauses of the PRCA code of conduct.

Some important BP clients including HSBC have withdrawn their business.

BP will collapse at any moment suffering irreparable damage to its own reputation and hundreds of people will lose their jobs.

The damage done to the overall reputation of the PR industry is yet unknown, but it's certainly got a task on its hands to improve it again. There are now big question marks over the matters of ethics, transparency and commercial confidentiality.

The bright side

Thankfully, there are plenty of fantastic PR professionals out there who achieve impressive results for their employers and clients, helping to change behaviours and spur people into a desired action, which is hopefully for good.

Maybe this scandal will spur the industry into tighter regulations and due diligence into PR firms and practitioners. The PRCA, for example, must have always known about BP's unsavoury clients and yet was still willing to have BP as a member.

Even Bill Gates said that if he was down to his last dollar he'd spend it on PR and Sir Richard Branson believes a good PR story is more effective than a front-page ad, so PR is certainly not all bad.

The PR industry, PR practitioners and any professional would do well to remember Warren Buffet when he said, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." 

Photo: Ingeta

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