14 September 2017
The collapse of Bell Pottinger
Does the moral outrage ring true?
by R.D.Shackleton
The moral outrage amongst corporate clients of the now infamous public relations agency, Bell Pottinger, does not entirely ring true. So many of the biggest names have deserted the consultancy since it became embroiled in the “race hate” scandal in South Africa that the beleaguered firm finally fell into administration this week; but would we have seen the same exodus by such blue chip names if the agency itself had not become the subject of such a relentless trashing in the press? And would the press itself have taken such a crusading stance about business ethics if the story had not been blessed with such colourful characters as Lord Bell, the one-time mouthpiece of Mrs Thatcher? Not to mention a dapper man-about-town CEO who is affianced to a socialite ex-wife of a billionaire casino operator – famously described as South Africa’s answer to Donald Trump. Such exotic personalities proved irresistible to the media and guaranteed that the travails of this PR consultancy were elevated from the ghetto of the business pages to bask in the prime-time coverage we have seen over the last few weeks.
This story is, therefore, more complicated than the simple morality tale projected by the media – and all those former Bell Pottinger clients who have been falling over themselves to explain that any association with unethical business practices is inconsistent with their corporate values. It would be invidious to single any company out but they range from the biggest high street banks to tobacco companies and major manufacturers.
The reality is that Bell Pottinger’s association with the South African Gupta brothers – the account at the heart of the scandal – was public knowledge for at least six months. The consultancy had been brought in by the Guptas to help counter public anger about the alleged depth of the relationship between their commercial interests on the one hand and the South African President, Jacob Zuma and the ruling party African National Congress on the other- particularly in relation to the award of major public contracts.
For the reported fee of £100,000-a-month, Bell Pottinger’s strategy was to construct a PR programme which sought to deflect public criticism from the asian Gupta brothers by stoking up controversy about the power of the country’s white-owned capital – and in the process trampling over the most sensitive fault lines of race relations in post apartheid South Africa. Small surprise, then that the opposition Democratic Alliance and allied pressure groups turned on Bell Pottinger as its involvement in the outrageous programme became known. The consultancy was the subject of ferocious domestic South African controversy for at least nine months.
By April this year, the climate in South Africa had grown so hostile that Bell Pottinger resigned the account. But driven by its spokeswoman, Phumzile van Damme, the Democratic Alliance party remained determined to hold the PR consultancy to account. Such was the growing controversy that in the summer the mainstream UK media locked onto the story, prompting CEO James Henderson to fire the main South African partner involved. And he apologised “unreservedly” for Bell Pottinger’s involvement in the murky affair.
By July, the momentum of critical media attention was unstoppable – Bell Pottinger’s demise became inevitable, especially when an investigation by the lawyers Herbert Smith, which had been commissioned by Bell Pottinger, determined that they had been failings of management oversight. Henderson duly resigned.
They may be wringing their hands now but during all these months of heated debate there was not a peep of public concern from the agency’s clients – even after July when the CEO confirmed malpractice in the Gupta account. One must therefore wonder how genuine are Corporate UK’s professions of ethical concern. Even when the full facts were made public, it looks highly doubtful whether many companies would have deserted Bell Pottinger if its reputation had not become so toxic in the media. Nor indeed the investment banks and lawyers who continued to feed them business and enjoy their corporate entertainment.
Neither clients, nor significantly the press itself, demonstrated any sustained interest in Bell Pottinger’s other more controversial clients. It was after all an exotic roster, which has included everyone from former Chilean president, Augusto Pinochet, to Belarus President Alexsander Lukashenko and Syrian First Lady, Asma al-Assad. It’s hard not to conclude that it was to a large extent self-interest rather than ethical concern which prompted the run on the agency over the last few days.
The only participants in this sorry affair to emerge with any real credit are Bell Pottinger’s opponents in South Africa. If it had not been for the savviness of the Democratic Alliance – sworn enemies of the ANC – there is every chance Bell Pottinger would be trading today. The great irony here is that one of the world’s hitherto most powerful PR companies was brought to its knees by the media strategy of South African MPs and political activists. Realising that its campaign against Bell Pottinger would never gain traction unless it generated interest from the UK media, the DA made the inspired move of appealing to a sleepy London based PR trade body ,the PRCA, to investigate the allegations. This is a trade body which has hitherto never applied any sanctions to a member. Nor does it even represent many of the industry’s biggest players. But the resulting decision to expel Bell Pottinger caught the media attention and ensured that the DA would be a central part of all successive press coverage. Bell Pottinger was beaten at its own game.
The humbling of Bell Pottinger is far more than a simple morality tale. It is yet another example of how, in the digital world, a well-planned grass-roots campaign can hold sway over international public opinion. Given the sensitivity of ethical business, corporates would do well to take heed.
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