June, 2001: Publius

By Greg Rushford
Published in The Rushford Report

Ah, PR. So much money spent. So little to show for it.

Why do so many politicians and corporations throw money at public relations, only to make themselves look silly, or worse?

Consider three classic examples. The first: Shandwick International’s PR campaign for the domestic steel lobby after the 1998 steel “crisis” (estimated total cost, $5 million) tried to imply that Alan Greenspan — one of America’s most prominent advocates of free trade — sympathized with protectionists.

Second: Last month, Hong Kong’s chief executive, C.H. Tung, tried to spruce up his city’s image with a $1.2 million PR campaign. Tung does not seem to understand, or care, that his own acts in office have created widespread fears that Hong Kong is turning away from its tradition of respect for the rule of law that distinguishes this great city from mainland Chinese cities.

The third case involves Motorola, Inc. Motorola’s PR officials have a history of making the company look bad when it is actually doing something that would make it look good. That is PR at its worst.

A self-promotional video prepared by Shandwick International for the 1998 Stand Up for Steel campaign has a clip of Alan Greenspan that links the Federal Reserve chairman to congressional protectionists like Rep. Richard Gephardt (D-Mo.) and Sen. Arlen Specter (R-Pa.). The clip has Greenspan testifying, “I’m very chagrined about what’s happening to the steel industry.” Greenspan would really be chagrined that Shandwick International’s couple-seconds clip didn’t let viewers see how he finished the thought, thus leaving the implication that he favored import quotas on “unfair,“ “illegal” foreign “dumpers.” Here‘s how Greenspan finished the same thought the last time he testified on steel issues. “Economists will say that workers should move from the steel districts of western Pennsylvania to Silicon Valley or its equivalent,“ Greenspan told the Senate Finance Committee on April 4. “And eventually they, or more likely their children, will move.” He added: “Thwarting competition by placing barriers to imports will prevent markets in the United States and other nations from deploying capital to their most productive uses, that is, the most cost-effective production of those goods and services most highly valued by consumers.” Protectionism, Greenspan concluded, might help some older workers “to reach retirement with dignity, but it will also keep frozen in place younger workers whose opportunities to secure jobs with better long-run prospects diminish with time.”

Hong Kong’s chief executive, C.H. Tung, believes that what Hong Kong needs is better PR. Tung has just spent more than $1.2 million of his constituent taxpayers’ money on Burson-Marsteller, which has come up with a stylish “dragon logo” to spruce up Hong Kong‘s image. The driving idea of the “Brand Hong Kong” campaign is to convey the sense that the great international port city is a gateway between East and West. As if everyone didn’t already know that. Tung unveiled the slick PR to Chinese President Jiang Zemin, Bill Clinton, and other political and corporate leaders who attended the Fortune Global Forum last month. At the same time Tung was exulting about Puff-the-Magic-PR-Dragon, the Hong Kong chief executive ordered his security forces to violate the civil liberties of perhaps 100 law-abiding citizens from the United States, Taiwan, and Australia. These people — apparently members of the peaceful Falun Gong spiritual movement who had violated no law — were turned away at Hong Kong’s airport and deported for unnamed “security reasons.” Tung, always a good host to his political master, did not want Jiang Zemin to be embarrassed by demonstrators expressing opposition to how mainland authorities treat the Falun Gong: surveillance, forced detentions, torture, and murders. Tung’s disregard for the rule of law did not stop there. A few days later, Tung — once again — asked Hong Kong’s Court of “Final” Appeal to seek guidance from mainland authorities in a legal case that Tung does not want his government to lose. Hong Kong does not have a PR problem, it has a C.H. Tung problem.

Motorola’s PR is even worse. Motorola is so arrogant that its PR officials can make the company look bad, even when it actually has a good story to tell. There is a history here.

Motorola is one of those companies — don’t get me started — that makes fine products but has a built-in system to be rude to the press. If you are a Washington, D.C. reporter, try calling one Motorola’s government affairs office here. You will be told that nobody will talk to you. Motorola’s receptionist refers reporters to a corporate flack in Motorola’s headquarters in Schaumberg, Illinois, who will give you the spin of the day and little else.

Could it be that Motorola doesn’t have confidence that its Washington operatives are sophisticated enough to deal with reporters? More likely, the real explanation is that this company thinks that it is none of the public’s business what its Washington lobbyists do to influence public-policy issues.

In the early 1990s, for example, Motorola regularly blasted away at Japan, which the Chicago-based multinational accused of several protectionist schemes to deny Motorola cellular telephones full access to Japanese markets. In fact, Motorola had some reasonable complaints. So reasonable that the Office of the U.S. Trade Representative was allied with Tokyo’s Ministry of International Trade and Industry against Japan’s protectionist postal and telecommunications ministry.

Yet Motorola PR executives in Illinois were so hardnosed and uncommunicative to inquiring reporters, that Motorola came across as a Japan-bashing bully. I once set out to write an article on Japanese protectionism, and ended writing one about an American company’s heavy-handedness.

But Motorola’s PR can be much worse.

In 1998, I picked up reports in Manila that a powerful aide to newly-elected Philippine President Joseph Estrada (who is currently incarcerated while waiting trial for graft) had tried to shakedown Motorola over an ongoing multi-million dollar procurement to buy radios for the Philippine National Police. Seems that Estrada’s aides wanted to steer the Motorola contract to their relatives. The affair hit the newspapers, there was the usual confusing flurry of charges and countercharges. Finally, Estrada’s first interior secretary, his brother-in-law, and a former Motorola employee were indicted.

As I reported in April after my most recent trip to Manila, Motorola appeared to have vulnerabilities to the U.S. Foreign Corrupt Practices Act. One of the indicted Estrada aides told me basically that Motorola was in no position to gripe about its treatment in the Estrada administration, implying that the company had first won the police-radio contract because it had hired agents with close family ties to the previous administration of Fidel Ramos.

Throughout all of this, Motorola PR officials fueled the suspicions by trying to cover-up the entire public record. The company would not even disclose such basic public-record information as how much Philippine taxpayers’ money was involved in the radio procurement. Was the public contract completed despite the controversy? Or had it been abrogated? Motorola has never said. When I was in Manila, Motorola officials refused to return telephone calls; after I got back to Washington they said I was perfectly free to go back to Manila and dig some more.

I took up the challenge, long-distance. After some digging, I was able to find out pretty much what had happened.

Motorola began providing the Philippine National Police with specially-designed, state-of-the-art secure communications in 1994. President Ramos turned to Motorola because police officials had been badly embarrassed. Two years previously, some major bank robbers escaped because the pursuing cops had no secure communications channels. By 1998, the Philippines had bought some $10.5 million of the Motorola radios, which helped provide security for Pope John Paul II’s 1995 visit.

There’s a lot more, but basically the story is that after Estrada and his gang came into power in 1998, they were more interested in steering contracts to their own relatives than in providing the Philippine police with the best radios. The Estrada crowd didn’t seem to care if their police bought low-tech radios with “open” or “nonproprietary” channels, instead of the secure Motorola radios — as long as the right people managed the contracts.
As for the Motorola employee who is charged with participating in the shakedown, it appears that company executives immediately removed him from his responsibilities as soon as they smelled a rat; and fired him not long thereafter.

In short, Motorola’s story could have been a perfectly defensible one. Yet the company tried to cover everything up.

Even a Philippine investigating panel that tried to get to the bottom of the matter expressed puzzlement that Motorola had been “stonewalling” it, too. In October 1999, the investigative body headed by former Sen. Rene Saguisag — a Harvard Law graduate — issued a 138-page report on the Motorola affair. I have now seen it. “To the end, Motorola proved evasive in this respect and perhaps some office with coercive powers may be able to open doors closed to us,“ the Saguisag panel said in a footnote. “This attitude should be factored in by government as a policy concern.“

Last month, after I informed Motorola’s PR office that I was going to write a story about their corporate PR attitude — highlighting the company’s refusal to share even basic public documents — a spokesman in Hong Kong said he was going to send some public records.

But the spokesman did not respond to two e-mails in which I asked if Motorola was now willing to divulge the value of the public contract, or say whether the Philippine police were able to finish buying the secure Motorola radios that they wanted.

Seems that Motorola’s PR is part of an entrenched corporate culture that is now biting back at the bottom line.

On May 18, Wall Street Journal reporter Andrea Petersen filed a report from Schaumburg saying that after reporting its first quarterly loss in more than 16 years, “Motorola is in trouble.”

There were several “management miscues” and “strategic blunders” responsible for the trouble, Petersen reported.

“But what really undid Motorola in the cellphone business is what Verizon Wireless chief marketing officer John Stratton calls Motorola’s ‘arrogance,’” the Journal reporter noted.

In that, at least, Motorola can say that its corporate PR has accurately reflected the attitude coming from the boardroom.

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