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Showing posts with label reputation. Show all posts
Showing posts with label reputation. Show all posts
Sunday 3 July 2022
Wednesday 1 April 2020
Will the coronavirus crisis rehabilitate the banks?
Lenders who triggered financial crash are now being asked to funnel stimulus money to companies and individuals write David Crow, Stephen Morris and Laura Noonan in The FT
On the day that Lehman Brothers filed for bankruptcy in September 2008, the front page of the Financial Times carried a photograph of John Thain, the then chief executive of Merrill Lynch. He was getting into his car after hours of talks at the Federal Reserve Bank of New York, and looked like a man who had stared into the abyss. In the following days more pictures would emerge of bankers leaving crisis meetings with policymakers, their ashen faces a portent of the horror to come.
As coronavirus rages and brings the global economy to a near standstill, bankers are once again roaming the corridors of power. In early March, Donald Trump summoned the chief executives of Bank of America, Citigroup and other large lenders to the White House, while Rishi Sunak, the UK chancellor, has held meetings and calls with their counterparts in Britain.
But this time is different, bankers say. Rather than being admonished for their role in causing the 2008 crisis, they are being called on to help distribute unprecedented stimulus programmes worth trillions of dollars designed to save the global economy from collapse. Although governments and central banks are providing much of the cash, lenders are being asked to serve as the “transmission mechanism” to ensure support finds its way to the companies and consumers who need it most.
Mike Corbat, chief executive of Citigroup, says the US lender is in “daily contact” with the White House and regulators, “relaying information . . . [on] what we’re seeing in the marketplace . . . what’s under stress”. In France, the finance minister and bank governor now speak daily to Frédéric Oudéa, chief executive of Société Générale, a bank that became a pariah in 2008 following a rogue trader scandal.
“The difference with 2008 is that we were seen as the problem then, everybody today knows the problem is the virus,” Mr Oudéa says. “We are one of the activities that has to function . . . we are the doctors of the economy.” (A dangerous thought - Editor)
While that description will jar with some, the difference in the tone of the discussions between governments, policymakers and banks has surprised some veterans of the financial crisis. “I don’t want to quote [former Goldman chief executive Lloyd] Blankfein and say we’re doing ‘God’s work’, but at least it feels like we’re on the side of the good this time round,” says one banker who advised the UK government in 2008.
Whether banks can maintain this new-found trust depends in large part on their ability to withstand coronavirus and its aftershocks. That in turn rests on whether post-financial crisis reforms — some of which the banks are lobbying furiously to relax — have left the system strong enough to survive. Banks appear to have passed the first test: a short but pronounced period of market mayhem and a co-ordinated drawdown of hundreds of billions of dollars of credit by corporations feeling the strain. One policymaker says that, faced with the coronavirus fallout, the global banking system of 2007 would have already imploded by now.
Jes Staley, chief executive of Barclays, says that “by any measure, the financial markets have traded and demonstrated volatility never seen before,” noting the “significant value destruction happening in pools of assets”. But, so far at least, the system is operating as it should. “It’s pretty extraordinary that with this amount of distress you haven’t seen more failures in asset management companies.”
He adds that the potential harbingers of a full-blown financial meltdown have not yet happened, such as a mutual fund preventing investors from making withdrawals. “There are just a lot of things you’d expect to happen before you start to see a real crisis,” says Mr Staley.
The real test of the resilience of banks and the wider financial system is yet to come. Huge swaths of the global economy, from airlines to retailers, have seen their revenues all but evaporate. Many companies and consumers will default on their loans, leading to a string of excruciating credit losses for banks that will hit profitability and blast a hole in their balance sheets. Meanwhile, ultra-low interest rates introduced by central banks to support the economy during the pandemic will put extra pressure on profits generated from lending.
“Everything in the world is on hold, and this cannot not be reflected in the financial world,” says Romain Boscher, chief investment officer for equities at Fidelity International. “Banks are still too big to fail, but also too crucial to disappear.”
Standard & Poor’s, the rating agency, last week warned that the US banking industry — which generated $195bn of profits last year — could swing to a $15bn loss in the next 12 months. Analysts at Berenberg say US and European lenders are facing an average 30 per cent plunge in profits this year and next. “Confronted with reduced activity, lower-for-longer interest rates, inflexible costs and higher loan losses, the outlook for bank earnings is one-way traffic,” they wrote in a recent note to clients.
Despite these headwinds, some bank executives have projected confidence. Ana Botín, executive chairman of Santander, the eurozone’s largest lender, told a financial services conference in March that the bank was forecasting only a 5 per cent drop in earnings this year, and that it expected no impact on its capital levels or midterm financial targets. Appearing via video link from a locked down Madrid, Ms Botin said those estimates were based on a “V-shaped” recession — a sharp shock followed by a rapid recovery, but stressed this was only one possible scenario.
However, some bankers say that such talk is premature, bordering on wishful thinking.
“If someone can tell me when they think [the virus] is going to be contained globally, and we will get back to a normalised global economy, then I can tell you what the credit cycle will look like,” says an executive at a rival global bank. “But given that no one can predict that, I find it hard to see people going out and being so confident.”
The depth of credit losses hinges on the amount of risk that countries are willing to share with the banking sector. Governments and central banks have rolled out fiscal and monetary stimulus programmes on a scale not seen since the second world war, ranging from central bank-backed credit facilities to loan guarantees and bailouts for industries including the US aviation sector. One Swiss bank executive says that absent such extraordinary support, banks’ loss-absorbing capital buffers “would have been like a brolly in a hurricane”.
One banker advising the UK government — which has earmarked £330bn for corporate loan guarantees and a commercial paper financing facility — says the schemes are untested. In particular, he warns that the guarantees will only apply to future lending. “It’s for new money, not for all the loans we’ve already made that are going to go bad.”
Bank executives have also warned that new accounting rules in Europe — which force lenders to set aside provisions for bad loans at an earlier date — will aggravate the problem by quickly impairing capital buffers and crimping their ability to lend at the very moment companies and consumers need cash. Policymakers are sympathetic, and have taken steps to reduce the shock of the new regulations. On Friday, regulators agreed to soften the impact of similar rules in the US.
But relaxing the rules will only buy time. “If the world blows up and all this government intervention doesn’t work, then this will eventually get to banks,” says the banker advising the UK government. “It will be an old-fashioned credit loss crisis, but on a scale not seen before.”
Even if banks can absorb the losses, some of the actions taken by policymakers will hurt the sector in the long run. Although recent interest rate cuts by the US Federal Reserve and the Bank of England are intended as a temporary measure, the 2008 crisis showed that central banks can struggle to increase rates once an immediate economic shock has passed. Meanwhile, a boom in first-quarter trading revenues for investment banks will probably only provide a short-term fillip.
Standard Chartered’s head of finance Andy Halford warns that “incredibly low interest rates” could cause corporate and retail depositors to move their cash out of accounts that have tended to pay a higher rate of interest in exchange for having the deposit locked up for a specific period of time. “Banks like to have deposit stickiness that can be used to underpin lending,” he says. “[If] there is less inclination to put money into sticky pots, there is less confidently there for circulation into the system.”6
The coronavirus crisis might have given banks an opportunity to repair their public image, but it also brings new reputational risks. As the transmission mechanism for doling out state aid, they will be required to perform a thorny task: deciding which companies should receive financial assistance and which would have struggled to survive regardless of the virus, and should therefore be cut loose. One policymaker says “picking winners and losers” could provoke a long-term public and political backlash against the banks.
“We want to avoid any moral hazard . . . governments should not just shell out money,” says Lars Machenil, chief financial officer of BNP Paribas, the French bank. “If a company, an airline for example, was in good shape in February then the government guarantees are [there] just to get it through the Covid-19 period.”
Mr Corbat says banks must walk a “fine line” between “being as supportive as we can be” without “in any way calling into question the soundness” of the bank or the financial system. “The last thing that we all want to see is . . . our consumers, our small businesses and our big businesses coming out of this . . . [with a] precariously bigger or larger position of indebtedness.”
Although many retail and consumer borrowers have been given payment holidays, some will never be able to repay their loans, which could lead to a wave of bankruptcies and repossessions that will test the public’s patience.
“This crisis did not originate in banking, but they can be part of the solution, and it might engulf them if, instead, they turn away,” says Paul Tucker, chair of the Systemic Risk Council, a group of former regulators, and previously deputy governor of the Bank of England. “They must not gouge customers, and need to suspend dividends and high-end bonuses. It is not a moment to put themselves first.”
Peter Orszag, an executive at Lazard who was White House budget director in 2009-10 in the first Obama administration, warns that the new-found trust between banks and policymakers could come under strain.
“I don’t want to call this the honeymoon period, because what’s going on is so awful, but there is a bit of coming together and recognising goodwill,” he says. However as banks are forced to decide which consumers and companies receive support, political and public opinion could change. “What happens is that six months in the dynamic can start to shift — the backlash doesn’t start immediately.”6
Like other businesses, banks are also facing huge logistical obstacles, with their scattered staff either working from home or off sick. A lockdown in India, where many lenders have chosen to locate call centres, is making it harder to deal with a deluge of incoming customer inquiries. Some banks have had to put restructuring efforts on hold, like HSBC, which last week said it would pause the vast majority of redundancies barely two months after it announced plans to slash 35,000 jobs. The cost of running a bank, already stubbornly high, is only going to rise.
Above all else, the survival of banks and the global financial system depends on whether governments can contain the public health crisis.
Brian Moynihan, chief executive of Bank of America, says the $2tn stimulus agreed last week by US lawmakers was of “a substantial size and dimension that most of us think is big enough to help do the trick”.
But he acknowledges the wider challenge: “What they’re doing on fiscal and monetary [policy] . . . is terrific, but the real thing that they have got to solve is the healthcare crisis.”
As coronavirus rages and brings the global economy to a near standstill, bankers are once again roaming the corridors of power. In early March, Donald Trump summoned the chief executives of Bank of America, Citigroup and other large lenders to the White House, while Rishi Sunak, the UK chancellor, has held meetings and calls with their counterparts in Britain.
But this time is different, bankers say. Rather than being admonished for their role in causing the 2008 crisis, they are being called on to help distribute unprecedented stimulus programmes worth trillions of dollars designed to save the global economy from collapse. Although governments and central banks are providing much of the cash, lenders are being asked to serve as the “transmission mechanism” to ensure support finds its way to the companies and consumers who need it most.
Mike Corbat, chief executive of Citigroup, says the US lender is in “daily contact” with the White House and regulators, “relaying information . . . [on] what we’re seeing in the marketplace . . . what’s under stress”. In France, the finance minister and bank governor now speak daily to Frédéric Oudéa, chief executive of Société Générale, a bank that became a pariah in 2008 following a rogue trader scandal.
“The difference with 2008 is that we were seen as the problem then, everybody today knows the problem is the virus,” Mr Oudéa says. “We are one of the activities that has to function . . . we are the doctors of the economy.” (A dangerous thought - Editor)
While that description will jar with some, the difference in the tone of the discussions between governments, policymakers and banks has surprised some veterans of the financial crisis. “I don’t want to quote [former Goldman chief executive Lloyd] Blankfein and say we’re doing ‘God’s work’, but at least it feels like we’re on the side of the good this time round,” says one banker who advised the UK government in 2008.
Whether banks can maintain this new-found trust depends in large part on their ability to withstand coronavirus and its aftershocks. That in turn rests on whether post-financial crisis reforms — some of which the banks are lobbying furiously to relax — have left the system strong enough to survive. Banks appear to have passed the first test: a short but pronounced period of market mayhem and a co-ordinated drawdown of hundreds of billions of dollars of credit by corporations feeling the strain. One policymaker says that, faced with the coronavirus fallout, the global banking system of 2007 would have already imploded by now.
Jes Staley, chief executive of Barclays, says that “by any measure, the financial markets have traded and demonstrated volatility never seen before,” noting the “significant value destruction happening in pools of assets”. But, so far at least, the system is operating as it should. “It’s pretty extraordinary that with this amount of distress you haven’t seen more failures in asset management companies.”
He adds that the potential harbingers of a full-blown financial meltdown have not yet happened, such as a mutual fund preventing investors from making withdrawals. “There are just a lot of things you’d expect to happen before you start to see a real crisis,” says Mr Staley.
The real test of the resilience of banks and the wider financial system is yet to come. Huge swaths of the global economy, from airlines to retailers, have seen their revenues all but evaporate. Many companies and consumers will default on their loans, leading to a string of excruciating credit losses for banks that will hit profitability and blast a hole in their balance sheets. Meanwhile, ultra-low interest rates introduced by central banks to support the economy during the pandemic will put extra pressure on profits generated from lending.
“Everything in the world is on hold, and this cannot not be reflected in the financial world,” says Romain Boscher, chief investment officer for equities at Fidelity International. “Banks are still too big to fail, but also too crucial to disappear.”
Standard & Poor’s, the rating agency, last week warned that the US banking industry — which generated $195bn of profits last year — could swing to a $15bn loss in the next 12 months. Analysts at Berenberg say US and European lenders are facing an average 30 per cent plunge in profits this year and next. “Confronted with reduced activity, lower-for-longer interest rates, inflexible costs and higher loan losses, the outlook for bank earnings is one-way traffic,” they wrote in a recent note to clients.
Despite these headwinds, some bank executives have projected confidence. Ana Botín, executive chairman of Santander, the eurozone’s largest lender, told a financial services conference in March that the bank was forecasting only a 5 per cent drop in earnings this year, and that it expected no impact on its capital levels or midterm financial targets. Appearing via video link from a locked down Madrid, Ms Botin said those estimates were based on a “V-shaped” recession — a sharp shock followed by a rapid recovery, but stressed this was only one possible scenario.
However, some bankers say that such talk is premature, bordering on wishful thinking.
“If someone can tell me when they think [the virus] is going to be contained globally, and we will get back to a normalised global economy, then I can tell you what the credit cycle will look like,” says an executive at a rival global bank. “But given that no one can predict that, I find it hard to see people going out and being so confident.”
The depth of credit losses hinges on the amount of risk that countries are willing to share with the banking sector. Governments and central banks have rolled out fiscal and monetary stimulus programmes on a scale not seen since the second world war, ranging from central bank-backed credit facilities to loan guarantees and bailouts for industries including the US aviation sector. One Swiss bank executive says that absent such extraordinary support, banks’ loss-absorbing capital buffers “would have been like a brolly in a hurricane”.
One banker advising the UK government — which has earmarked £330bn for corporate loan guarantees and a commercial paper financing facility — says the schemes are untested. In particular, he warns that the guarantees will only apply to future lending. “It’s for new money, not for all the loans we’ve already made that are going to go bad.”
Bank executives have also warned that new accounting rules in Europe — which force lenders to set aside provisions for bad loans at an earlier date — will aggravate the problem by quickly impairing capital buffers and crimping their ability to lend at the very moment companies and consumers need cash. Policymakers are sympathetic, and have taken steps to reduce the shock of the new regulations. On Friday, regulators agreed to soften the impact of similar rules in the US.
But relaxing the rules will only buy time. “If the world blows up and all this government intervention doesn’t work, then this will eventually get to banks,” says the banker advising the UK government. “It will be an old-fashioned credit loss crisis, but on a scale not seen before.”
Even if banks can absorb the losses, some of the actions taken by policymakers will hurt the sector in the long run. Although recent interest rate cuts by the US Federal Reserve and the Bank of England are intended as a temporary measure, the 2008 crisis showed that central banks can struggle to increase rates once an immediate economic shock has passed. Meanwhile, a boom in first-quarter trading revenues for investment banks will probably only provide a short-term fillip.
Standard Chartered’s head of finance Andy Halford warns that “incredibly low interest rates” could cause corporate and retail depositors to move their cash out of accounts that have tended to pay a higher rate of interest in exchange for having the deposit locked up for a specific period of time. “Banks like to have deposit stickiness that can be used to underpin lending,” he says. “[If] there is less inclination to put money into sticky pots, there is less confidently there for circulation into the system.”6
The coronavirus crisis might have given banks an opportunity to repair their public image, but it also brings new reputational risks. As the transmission mechanism for doling out state aid, they will be required to perform a thorny task: deciding which companies should receive financial assistance and which would have struggled to survive regardless of the virus, and should therefore be cut loose. One policymaker says “picking winners and losers” could provoke a long-term public and political backlash against the banks.
“We want to avoid any moral hazard . . . governments should not just shell out money,” says Lars Machenil, chief financial officer of BNP Paribas, the French bank. “If a company, an airline for example, was in good shape in February then the government guarantees are [there] just to get it through the Covid-19 period.”
Mr Corbat says banks must walk a “fine line” between “being as supportive as we can be” without “in any way calling into question the soundness” of the bank or the financial system. “The last thing that we all want to see is . . . our consumers, our small businesses and our big businesses coming out of this . . . [with a] precariously bigger or larger position of indebtedness.”
Although many retail and consumer borrowers have been given payment holidays, some will never be able to repay their loans, which could lead to a wave of bankruptcies and repossessions that will test the public’s patience.
“This crisis did not originate in banking, but they can be part of the solution, and it might engulf them if, instead, they turn away,” says Paul Tucker, chair of the Systemic Risk Council, a group of former regulators, and previously deputy governor of the Bank of England. “They must not gouge customers, and need to suspend dividends and high-end bonuses. It is not a moment to put themselves first.”
Peter Orszag, an executive at Lazard who was White House budget director in 2009-10 in the first Obama administration, warns that the new-found trust between banks and policymakers could come under strain.
“I don’t want to call this the honeymoon period, because what’s going on is so awful, but there is a bit of coming together and recognising goodwill,” he says. However as banks are forced to decide which consumers and companies receive support, political and public opinion could change. “What happens is that six months in the dynamic can start to shift — the backlash doesn’t start immediately.”6
Like other businesses, banks are also facing huge logistical obstacles, with their scattered staff either working from home or off sick. A lockdown in India, where many lenders have chosen to locate call centres, is making it harder to deal with a deluge of incoming customer inquiries. Some banks have had to put restructuring efforts on hold, like HSBC, which last week said it would pause the vast majority of redundancies barely two months after it announced plans to slash 35,000 jobs. The cost of running a bank, already stubbornly high, is only going to rise.
Above all else, the survival of banks and the global financial system depends on whether governments can contain the public health crisis.
Brian Moynihan, chief executive of Bank of America, says the $2tn stimulus agreed last week by US lawmakers was of “a substantial size and dimension that most of us think is big enough to help do the trick”.
But he acknowledges the wider challenge: “What they’re doing on fiscal and monetary [policy] . . . is terrific, but the real thing that they have got to solve is the healthcare crisis.”
Wednesday 6 September 2017
'Reputation laundering' is lucrative business for London PR firms
Oppressive foreign regimes are often such valuable accounts that they are considered worth the risk of a backlash
Mark Sweney in The Guardian
From foreign governments of dubious repute and dictators looking for an image overhaul to propaganda videos and fake Wikipedia entries – if there is a PR brief of dubious ethical nature that needs a fix then more often than not it is one of London’s big-name agencies that gets the call.
Bell Pottinger’s public vilification and expulsion from its own trade body for running a social media campaign to stir up racial tension in South Africa for the wealthy Gupta family has lifted the lid on the secretive and highly lucrative business of representing controversial clients.
Over more than three decades in the business Tim Bell, Margaret Thatcher’s favourite PR man, who left Bell Pottinger last summer, has amassed something of a who’s who of what could charitably be called sensitive clients.
These have included the Pinochet Foundation and the governments of Bahrain and Egypt, and there was a $500m (£384m) contract to make fake al-Qaida videos in Iraq for the US government.
“You say words like Pinochet and ‘oh my god that is bad news’, but I don’t accept that,” Lord Bell said. “There are two sides to every story and you have to handle it so your side is prevalent. I don’t know why they are [considered] risky clients. They are only risky if what you are trying to promote an idea that isn’t sound.”
He cited Alexander Lukashenko, the Belarusian president who has been called Europe’s last dictator, as an example of when taking on such clients went wrong. “There are lots of people I regret having got involved with. Lukashenko went well for six months then changed his mind [about the strategy], behaved differently and I resigned the account.”
Foreign governments with oppressive regimes are often such valuable accounts that they are considered worth the risk of a potential PR backlash.
The Portland agency, founded by Tony Blair’s former adviser Tim Allan, has previously advised Vladimir Putin and worked with Kazakhstan, Jordan and Morocco.
A contract with Qatar, which has been heavily criticised for its record on human rights, is focused on building a government affairs function. Portland declined to comment but Allan has previously said such work is about “openness and engagement” and that opening up secretive nations is “not an affront to democracy”.
Late last year the PR guru Matthew Freud picked up a hugely valuable brief from Saudi Arabia, which has executed more than 150 people in each of the last two years.
The account, led by deputy Crown Prince Mohammed bin Salman, was pitched to a number of corporate PR firms in London. The PR agency Freuds declined to comment but at the time of winning the business said it was focused on a “programme of economic, educational and cultural modernisation to help diversify the economy and create a sustainable and prosperous future for Saudi’s young people.”
A senior PR executive said: “Tyrants, dictatorships and governments that may not be democratic, or are sliding into one-party states, tend to come to places like London, New York and Washington effectively for reputation laundering. If you are cynical about it, that is what it is.”
A number of senior PR executives agree that Bell Pottinger working for the Gupta family, which has been accused of benefiting financially from its close links to the South African president, Jacob Zuma, is not in itself a PR crime.
But stoking racial tension in a country that has struggled to achieve balance in a post-apartheid era is a particularly egregious strategy to have pursued, and not one that is rife among the dark arts employed by UK agencies.
“I think that Bell Pottinger’s work is an outlier,” said Danny Rogers, editor-in-chief of PR Week. “They are accused of creating fake news and blogs, a serious transgression. It is not typical of what the British PR industry does. Work varies from what you would consider to be institution-building and opening communications by governments to the extreme end of the sort of work Bell Pottinger was doing for the Guptas.”
Francis Ingham, director general of the trade body PRCA for the last decade, said the UK industry was “overwhelmingly ethical and professional”.
“There is always the occasional rogue element and our role is to punish them,” he said.
Ever the risk-taker, Lord Bell, after leaving the agency he co-founded, immediately looked for more of the same, setting up Sans Frontières, the same name as the arm of Bell Pottinger that handled sometimes controversial geo-political work.
Bell, who has also represented clients including the News UK chief Rebekah Brooks and the entertainer Rolf Harris, said the Bell Pottinger scandal would prompt the industry to take cover for a while but then it would be business as usual.
“There will be a lull for a while, then people will forget the controversy and people will come back,” he said.
Yet, even the hard-bitten Bell admitted there were some clients beyond the pale even for him. He turned down representing Zimbabwe’s president, Robert Mugabe, as well as the Labour party (“I wouldn’t have done a good job”).
“I wish we hadn’t taken the Guptas,” he said. “And I would like to have worked for BP, to have handled the Deepwater Horizon incident. As long as there is controversy about things there will be controversial characters. You can’t spend your life regretting what you do.”
Mark Sweney in The Guardian
From foreign governments of dubious repute and dictators looking for an image overhaul to propaganda videos and fake Wikipedia entries – if there is a PR brief of dubious ethical nature that needs a fix then more often than not it is one of London’s big-name agencies that gets the call.
Bell Pottinger’s public vilification and expulsion from its own trade body for running a social media campaign to stir up racial tension in South Africa for the wealthy Gupta family has lifted the lid on the secretive and highly lucrative business of representing controversial clients.
Over more than three decades in the business Tim Bell, Margaret Thatcher’s favourite PR man, who left Bell Pottinger last summer, has amassed something of a who’s who of what could charitably be called sensitive clients.
These have included the Pinochet Foundation and the governments of Bahrain and Egypt, and there was a $500m (£384m) contract to make fake al-Qaida videos in Iraq for the US government.
“You say words like Pinochet and ‘oh my god that is bad news’, but I don’t accept that,” Lord Bell said. “There are two sides to every story and you have to handle it so your side is prevalent. I don’t know why they are [considered] risky clients. They are only risky if what you are trying to promote an idea that isn’t sound.”
He cited Alexander Lukashenko, the Belarusian president who has been called Europe’s last dictator, as an example of when taking on such clients went wrong. “There are lots of people I regret having got involved with. Lukashenko went well for six months then changed his mind [about the strategy], behaved differently and I resigned the account.”
Foreign governments with oppressive regimes are often such valuable accounts that they are considered worth the risk of a potential PR backlash.
The Portland agency, founded by Tony Blair’s former adviser Tim Allan, has previously advised Vladimir Putin and worked with Kazakhstan, Jordan and Morocco.
A contract with Qatar, which has been heavily criticised for its record on human rights, is focused on building a government affairs function. Portland declined to comment but Allan has previously said such work is about “openness and engagement” and that opening up secretive nations is “not an affront to democracy”.
Late last year the PR guru Matthew Freud picked up a hugely valuable brief from Saudi Arabia, which has executed more than 150 people in each of the last two years.
The account, led by deputy Crown Prince Mohammed bin Salman, was pitched to a number of corporate PR firms in London. The PR agency Freuds declined to comment but at the time of winning the business said it was focused on a “programme of economic, educational and cultural modernisation to help diversify the economy and create a sustainable and prosperous future for Saudi’s young people.”
A senior PR executive said: “Tyrants, dictatorships and governments that may not be democratic, or are sliding into one-party states, tend to come to places like London, New York and Washington effectively for reputation laundering. If you are cynical about it, that is what it is.”
A number of senior PR executives agree that Bell Pottinger working for the Gupta family, which has been accused of benefiting financially from its close links to the South African president, Jacob Zuma, is not in itself a PR crime.
But stoking racial tension in a country that has struggled to achieve balance in a post-apartheid era is a particularly egregious strategy to have pursued, and not one that is rife among the dark arts employed by UK agencies.
“I think that Bell Pottinger’s work is an outlier,” said Danny Rogers, editor-in-chief of PR Week. “They are accused of creating fake news and blogs, a serious transgression. It is not typical of what the British PR industry does. Work varies from what you would consider to be institution-building and opening communications by governments to the extreme end of the sort of work Bell Pottinger was doing for the Guptas.”
Francis Ingham, director general of the trade body PRCA for the last decade, said the UK industry was “overwhelmingly ethical and professional”.
“There is always the occasional rogue element and our role is to punish them,” he said.
Ever the risk-taker, Lord Bell, after leaving the agency he co-founded, immediately looked for more of the same, setting up Sans Frontières, the same name as the arm of Bell Pottinger that handled sometimes controversial geo-political work.
Bell, who has also represented clients including the News UK chief Rebekah Brooks and the entertainer Rolf Harris, said the Bell Pottinger scandal would prompt the industry to take cover for a while but then it would be business as usual.
“There will be a lull for a while, then people will forget the controversy and people will come back,” he said.
Yet, even the hard-bitten Bell admitted there were some clients beyond the pale even for him. He turned down representing Zimbabwe’s president, Robert Mugabe, as well as the Labour party (“I wouldn’t have done a good job”).
“I wish we hadn’t taken the Guptas,” he said. “And I would like to have worked for BP, to have handled the Deepwater Horizon incident. As long as there is controversy about things there will be controversial characters. You can’t spend your life regretting what you do.”
Tuesday 10 March 2015
Top Australian surgeon advises female doctors to allow sexual harassment to get ahead
Lucy Clarke-Billings in The Independent
A senior surgeon has triggered controversy after telling junior female doctors to go along with sexual abuse at work for the sake of their careers.
Australian vascular surgeon Dr Gabrielle McMullin drew criticism for comments made at the launch of her book - Pathways to Gender Equality.
Speaking in an ABC radio interview after the event, she said she encouraged women in her field to protect their climb up the professional ladder by “complying with requests” for sex.
The Sydney-based surgeon said sexism is so rife among her colleagues, young women should probably just accept unwanted sexual advances because speaking out would tarnish their reputations.
Dr McMullin, who studied medicine in Dublin, Ireland, said she stands by the comments she made on Friday but that her advice was “irony”.
"What I tell my trainees is that, if you are approached for sex, probably the safest thing to do in terms of your career is to comply with the request," she said after the launch.
Her shocking comments triggered angry reactions from sex abuse and domestic violence campaigners, who claimed her remarks were “appalling” and “irresponsible”.
Dr McMullin told ABC's AM program the story of Dr Caroline Tan, a young doctor who won a sexual harassment case in 2008 against a surgeon who forced himself on her while she was training at a Melbourne Hospital.
Dr Tan didn't tell anyone what had happened until the surgeon started giving her reports that were so bad they threatened the career she had worked so hard for.
But McMullin warns complaining to the supervising body is the 'worst thing' trainees could do.
“Despite that victory, she has never been appointed to a public position in a hospital in Australasia,” she said. “Her career was ruined by this one guy asking for sex on this night.
“And realistically, she would have been much better to have given him a blow-job on that night.”
Dr McMullin's comments have been roundly criticised by others in the medical profession and in women’s rights groups.
But she said many people had thanked her for speaking out and some had come forward with more appalling stories of their experiences.
She said her critics had misunderstood her stance.
"Of course I don't condone any form of sexual harassment and the advice that I gave to potential surgical trainees was irony, but unfortunately that is the truth at the moment, that women do not get supported if they make a complaint," she told the ABC.
"And that's where the problem is, so what I'm suggesting is that we need a solution for that problem not to condone that behaviour.
"It's not dealt with properly, women still feel that their careers are compromised if they complain, just like rape victims are victimised if they complain," she said.
One victim, who did not want to be identified for fear of losing her job, told the ABC she experienced years of sexual harassment from a senior surgeon.
The victim said if she revealed her identify, she would not be considered a safe person to work with.
"If you complain... you'll be exposed, you'll be hung up to dry, you won't be able to work," she said.
"You'd be seen as a liability, that's my opinion. You absolutely would be seen as a liability moving forward.
"It's well and good that the legislation and laws say x, y and z but that wouldn't happen in practise. It would be unlikely to."
Kate Drummond, chair of the Women in Surgery committee at the Royal Australasian College of Surgeons, disagreed with this suggestion.
"I think we have robust processes, not only through the college for the trainees but also through the workplace," she told the ABC'S The World Today's program.
"I mean, these are people who work in hospitals and there are clear workplace processes to deal with these kinds of problems.
"And so I think there are parallel processes that we would encourage people to use and also to take the support of people like those of us in the Women in Surgery committee and we're very happy to strongly support these people."
Ms Drummond said there had been less than one complaint per year to the Women in Surgery committee regarding sexual harassment.
Saturday 22 June 2013
Reputed firms employ criminals to steal rivals' information
Some of Britain’s most respected industries routinely employ criminals to hack, blag and steal personal information on business rivals and members of the public, according to a secret report leaked to The Independent.
The Serious Organised Crime Agency (Soca) knew six years ago that law firms, telecoms giants and insurance were hiring private investigators to break the law and further their commercial interests, the report reveals, yet the agency did next to nothing to disrupt the unlawful trade.
It is understood that one of the key hackers mentioned in the confidential Soca report admitted that 80 per cent of his client list was taken up by law firms, wealthy individuals and insurance companies. Only 20 per cent was attributed to the media, which was investigated by the Leveson Inquiry after widespread public revulsion following the phone-hacking scandal.
Soca, dubbed “Britain’s FBI”, knew six years ago that blue-chip institutions were hiring private investigators to obtain sensitive data – yet did next to nothing to disrupt the unlawful trade.
The report was privately supplied to the Leveson Inquiry into press ethics in 2012 yet the corruption in other identified industries, including the law, insurance and debt collectors, and among high-net worth individuals, was not mentioned during the public sessions or included in the final report.
The report was privately supplied to the Leveson Inquiry into press ethics in 2012 yet the corruption in other identified industries, including the law, insurance and debt collectors, and among high-net worth individuals, was not mentioned during the public sessions or included in the final report.
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Also read
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McLibel leaflet was co-written by undercover police officer Bob Lambert
Sreesanth - Another Modern Day Valmiki
----------------
Tom Watson, the campaigning Labour MP, said: “What is astonishing about this whole murky affair is that Soca had knowledge of massive illegal invasions of privacy in the newspaper industry – but also in the supply chains of so-called blue-chip companies.
“I believe they are sitting on physical evidence that has still not been disclosed fully to forensic investigators at the Metropolitan Police. The law should also be rigorously applied to other sectors that have got away with it.”
One of five police investigations reviewed by Soca found private detectives listening in to targets’ phone calls in real-time. The report said a “telephone interception specialist manufactured several devices which were physically attached to the target’s landline at the relevant signal box by a British Telecom-trained telecommunications engineer.”
During another police inquiry, the Soca report said officers found a document entitled “The Blagger’s Manual”, which outlined methods of accessing personal information by calling companies, banks, HM Revenue and Customs, councils, utility providers and the NHS.
“It is probably a good idea to overcome any moral hang-ups you might have about ‘snooping’ or ‘dishonesty’,” it read. “The fact is that through learning acts of technical deception, you will be performing a task which is not only of value to us or our client, but to industry as a whole.”
The Independent understands that one of the key hackers mentioned in the report has admitted that 80 per cent of his client list was taken up by law firms, wealthy individuals and insurance firms while only 20 per cent of clients were from the media.
A security source with knowledge of the report – codenamed Project Riverside – said clients who hired corrupt private investigators included:
* a major telecoms company;
* a celebrity who broadcasts to millions of people every week;
* a well-known media personality, who hired a private investigator to hack his employee’s computer as he suspected she was selling confidential information to business rivals;
* a businessman who hired hackers to obtain intelligence on rivals involved in an ultimately unsuccessful £500m corporate takeover.
A company which was owed money by property developers also hired private detectives to track down the firm’s family information, detailed transactions from four bank accounts, information from credit card statements and an itemised mobile phone bill. The company paid £14,000 for the information.
However, the most common industry employing criminal private detectives is understood to be law firms, including some of those involved in high-end matrimonial proceedings and litigators investigating fraud on behalf of private clients.
Illegal practices identified by Soca investigators went well beyond the relatively simple crime of voicemail hacking and included live phone interceptions, police corruption, computer hacking and perverting the course of justice.
Despite the widespread criminality uncovered by Project Riverside between 2006 and 2007, none of the suspects identified in the report was charged with criminal offences until after the phone-hacking scandal four years later.
Police were finally forced to act after the scandal that caused the closure of Britain’s biggest-selling newspaper, the resignation of two Scotland Yard police chiefs and the establishment of the Leveson Inquiry.
The Labour MP Keith Vaz, chairman of the Home Affairs Select Committee, said: “I am deeply concerned about these revelations. I will be seeking an explanation from Soca as to why this was not told to the Committee when we took evidence from them about the issue of private investigators.
“It is important that we establish how widespread this practice was and why no action was taken to stop what amounted to criminal activity of the worst kind.”
The former News of the World deputy editor Neil Wallis added: “Until The Independent told me about this, I had not the slightest clue of the scale of illegal information theft going on among our supposedly respectable professions. Did Lord Justice Leveson only conduct his inquiry into 20 per cent of the problem?”
The Soca report, which contains “sensitive material” that may be subject to “public-interest immunity” tests – effectively banning it from ever being published even if it were disclosed during legal proceedings – found private investigators to be experts at “developing and cultivating useful relationships” through “socialising with law enforcement personnel”. One particular method identified was to become a member of the Freemasons, which has been repeatedly linked to corruption in the police and judiciary.
Victims of computer hacking identified by Soca – who suffered eBlaster Trojan attacks which allowed private investigators to monitor their computer usage remotely – include the former British Army intelligence officer Ian Hurst. He was hacked by private investigators working for News of the World journalists who wanted to locate Freddie Scappaticci, a member of the IRA who worked as a double-agent codenamed “Stakeknife”.
Another victim was Derek Haslam, a former Metropolitan Police officer who was persuaded by Scotland Yard to go undercover and infiltrate Southern Investigations, a private detective firm, as a “covert human intelligence source”.
A Soca spokesman said: “Soca produced a confidential report in 2008 on the issue of licensing the private investigation industry. This report remains confidential and Soca does not comment on leaked documents or specific criminal investigations. Information is shared with other partners as required.” Scotland Yard declined to comment.
Wednesday 31 January 2007
Detox for the soul
Famous? Done something you regret? Not sure how to salvage your reputation? Just check into rehab, says Zoe Williams
Wednesday January 31, 2007
The Guardian
Jade Goody has gone into rehab, admitted for "depression and stress". "Jade has struggled since leaving the [Big Brother] house a week ago and learning that she has become the most hated figure in Britain," a friend told the Sun. I wish I had a friend who formed such succinct sentences. It makes you realise how much your own friends blether on. Here's the sequence of events, as I understand it: Jade calls Shilpa Shetty "Shilpa Poppadom" and "Shilpa Fuckawallah" and tells her she should spend time in "the slums"; she exits house; defends own reputation; realises she's on a sticky wicket; "collapses" with stress; is "told by GP that he was going to refer her to the Priory", but seems to have entered said institution under her own steam; is "now being monitored by doctors, while they decide what treatment to give her".This is a funny old business, isn't it? The stress-induced collapse is always so fishy. It's such an unusual response, when most people, under stress, just absent-mindedly eat ginger biscuits. In cases of rehab for addiction, where a person has got themselves into a fix from which they must, for their own wellbeing, be rescued and rehabilitated, doctors pretty much know what to do. "A heroin addict, you say? Let's monitor her while we decide whether or not to take away her heroin . . . Oh, depressive? You watch her pacing up and down, I'll just go and Google Prozac, see if that might work."
I hate to call anyone a fraud. It seems such a petty accusation, set against existing tabloid charges of "racist", "bully" and "fat". Celebrity stress is not exactly the most serious of medical conditions. It doesn't even sound that medical. You might just as well refer yourself to a creche.
I do not, however, think this is self-indulgence on Jade's part. Rehab, in this instance, is being used as a one-stop redemption shop. It's a neat mea culpa previously used by Mel Gibson, after his antisemitic outburst last August, when he asked a police officer if he was a "fucking Jew" and shouted "the Jews are responsible for all the wars in the world". Mel, of course, wasn't the first star ever to enter rehab - indeed, going into rehab on the advice of a doctor, or a judge, with handcuffs on is as old as the Hollywood hills - but Gibson illustrates neatly the more modern variant of self-referral. It is a way of atoning that you can do really very fast, and of course, it's not that much of a hardship either. You were never medically referred, so when you get there, doctors don't know what to do with you except watch you. And a lot of these people are actors. They are used to being watched. Mel said, after his curious explosion, "I am not a bigot; hatred of any kind goes against my faith." But naturally, this was not sufficient - words have never been quite vast enough to convey atonement, which is why in the olden days they used to make up Songs of Atonement.
It seems to be particularly in misdemeanours of bigotry that only residential self-flagellation will do - to complete the prejudice triptych, along with Jade's racism and Mel's antisemitism, Isaiah Washington, star of Grey's Anatomy, rehabbed himself for his anti-gay remarks (he called one of his fellow actors a "faggot".) He said, "I regard this as a necessary step toward understanding why I did what I did and making sure it never happens again."
The only thing that comes close to (actually, thinking about it, probably surpasses) bigotry for hot social shame is sexual harassment, for which Mark Foley institutionalised himself last year. The Republican congressman, who sent sexually inappropriate emails and messages to teenage boys, explained: "I strongly believe that I am an alcoholic and have accepted the need for immediate treatment for alcoholism and other behavioural problems." It's rather American, isn't it, blaming alcohol for the fact that he couldn't stop badgering his staff for sex? In England, one might be tempted to respond, "Matey, we all like a drink, but I certainly don't employ 16-year-olds and then spend the day sexy-mailing them, even when I've had an absolute skinful."
So where did this come from, this self- disciplining (in the most literal sense)? I've seen the seeds of it in children; a friend of mine's kid will do a running commentary on his own naughtiness, finishing off with suggestions for an appropriate punishment, so that when he has really pushed it, and upset everyone, and ruined everybody's day, he'll shout, "Now I've been really bad! Oh, lock me in the car!" I don't, however, think Mel Gibson got the idea from my friend's naughty kid; on the contrary, it comes from the judicial system, in which - far more frequently in America, it must be said - stars are exempted from custodial sentencing by agreeing to a spell in Betty Ford.
There's a distinctly different tang to that kind of offence, though: Winona Ryder did rehab instead of prison for her shoplifting. She would never have had to redeem herself with us, her public, for such an offence, since a) nobody really minds a shoplifter - it feels like a nice, of-the-people crime, and b) she had already redeemed herself with her lovely Marc Jacobs court outfits.
Andy Dick (you know Andy Dick! You will find him in the not-very-famous-but-makes-lists-of-famous-people-with-addiction-problems-look-longer section of the library), Charlie Sheen, Nicole Richie . . . oh, there are tons of them. They were mainly addicted to painkillers. What this really rams home to me is how much better American painkillers are than ours.
The question remains: how much of an atonement is it when you admit yourself and you're not even really addicted to anything? What happens when you get to the Priory? Do they still go through your luggage and make you go to the group therapy, or are you allowed to just sit about looking glum? Doesn't that drive the proper addicts crazy? Is it like AA - do you still have to go round all your family and friends when you get out, apologising for the time you arrived at their wedding/ bar mitzvah [not that] drunk, [really not at all] whacked out on drugs, [no more] unreliable and flaky [than the next man]? And if it is rehab lite, must one go residential? Couldn't Jade have said sorry with a detox? Couldn't she just have given up wheat, then put out a press release? "I may be guilty of racism, but I've eschewed doughnuts in penitence and, by the by, beaten my bloat!" ·
I hate to call anyone a fraud. It seems such a petty accusation, set against existing tabloid charges of "racist", "bully" and "fat". Celebrity stress is not exactly the most serious of medical conditions. It doesn't even sound that medical. You might just as well refer yourself to a creche.
I do not, however, think this is self-indulgence on Jade's part. Rehab, in this instance, is being used as a one-stop redemption shop. It's a neat mea culpa previously used by Mel Gibson, after his antisemitic outburst last August, when he asked a police officer if he was a "fucking Jew" and shouted "the Jews are responsible for all the wars in the world". Mel, of course, wasn't the first star ever to enter rehab - indeed, going into rehab on the advice of a doctor, or a judge, with handcuffs on is as old as the Hollywood hills - but Gibson illustrates neatly the more modern variant of self-referral. It is a way of atoning that you can do really very fast, and of course, it's not that much of a hardship either. You were never medically referred, so when you get there, doctors don't know what to do with you except watch you. And a lot of these people are actors. They are used to being watched. Mel said, after his curious explosion, "I am not a bigot; hatred of any kind goes against my faith." But naturally, this was not sufficient - words have never been quite vast enough to convey atonement, which is why in the olden days they used to make up Songs of Atonement.
It seems to be particularly in misdemeanours of bigotry that only residential self-flagellation will do - to complete the prejudice triptych, along with Jade's racism and Mel's antisemitism, Isaiah Washington, star of Grey's Anatomy, rehabbed himself for his anti-gay remarks (he called one of his fellow actors a "faggot".) He said, "I regard this as a necessary step toward understanding why I did what I did and making sure it never happens again."
The only thing that comes close to (actually, thinking about it, probably surpasses) bigotry for hot social shame is sexual harassment, for which Mark Foley institutionalised himself last year. The Republican congressman, who sent sexually inappropriate emails and messages to teenage boys, explained: "I strongly believe that I am an alcoholic and have accepted the need for immediate treatment for alcoholism and other behavioural problems." It's rather American, isn't it, blaming alcohol for the fact that he couldn't stop badgering his staff for sex? In England, one might be tempted to respond, "Matey, we all like a drink, but I certainly don't employ 16-year-olds and then spend the day sexy-mailing them, even when I've had an absolute skinful."
So where did this come from, this self- disciplining (in the most literal sense)? I've seen the seeds of it in children; a friend of mine's kid will do a running commentary on his own naughtiness, finishing off with suggestions for an appropriate punishment, so that when he has really pushed it, and upset everyone, and ruined everybody's day, he'll shout, "Now I've been really bad! Oh, lock me in the car!" I don't, however, think Mel Gibson got the idea from my friend's naughty kid; on the contrary, it comes from the judicial system, in which - far more frequently in America, it must be said - stars are exempted from custodial sentencing by agreeing to a spell in Betty Ford.
There's a distinctly different tang to that kind of offence, though: Winona Ryder did rehab instead of prison for her shoplifting. She would never have had to redeem herself with us, her public, for such an offence, since a) nobody really minds a shoplifter - it feels like a nice, of-the-people crime, and b) she had already redeemed herself with her lovely Marc Jacobs court outfits.
Andy Dick (you know Andy Dick! You will find him in the not-very-famous-but-makes-lists-of-famous-people-with-addiction-problems-look-longer section of the library), Charlie Sheen, Nicole Richie . . . oh, there are tons of them. They were mainly addicted to painkillers. What this really rams home to me is how much better American painkillers are than ours.
The question remains: how much of an atonement is it when you admit yourself and you're not even really addicted to anything? What happens when you get to the Priory? Do they still go through your luggage and make you go to the group therapy, or are you allowed to just sit about looking glum? Doesn't that drive the proper addicts crazy? Is it like AA - do you still have to go round all your family and friends when you get out, apologising for the time you arrived at their wedding/ bar mitzvah [not that] drunk, [really not at all] whacked out on drugs, [no more] unreliable and flaky [than the next man]? And if it is rehab lite, must one go residential? Couldn't Jade have said sorry with a detox? Couldn't she just have given up wheat, then put out a press release? "I may be guilty of racism, but I've eschewed doughnuts in penitence and, by the by, beaten my bloat!" ·
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