The inexorable rise of the PR men

With firms like Bell Pottinger working for foreign governments, we must now question everything more, not less.

In December 2010, a street vendor in Tunisia called Mohamed Bouazizi burned himself alive, thereby commencing the Arab Spring. The definitive history is still to be written, but it seems clear Bouazizi’s actions struck a nerve with a population that was tired of unemployment, inflation, corruption, lack of political freedom and poor living conditions.

Hardly anyone noticed, but seven months before Bouazizi took such drastic action, an American company put out a press release about the country, which is still viewable online. The company was called Washington Media Group, and it was celebrating the fact that it had been hired to work with the Tunisian government.

John Leary, the company’s vice president, is quoted: “Tunisia is also a stable democracy where American and European businesses can thrive. This is an important message for the international community and WMG has developed a number of innovative strategies to help ensure that message resonates with the appropriate audiences.” The country is described as “An international business success story”.

As the Arab Spring developed, and various leaderships reacted with increasing brutality, so the links between them and Washington PR firms were exposed. In March 2011, it was reported that more than a third of partners at another company - Qorvis - had jumped ship. One anonymous ex-employee was quoted: "People don't want to be seen representing all these countries - you take a look at the State Department's list of human rights violators and some of our clients were on there."

It was only a matter of time before the link to the UK was made. Former staffers claimed that much of Qorvis’s work was coming to the firm because of its partnership with Bell Pottinger, the UK’s largest PR firm, set up by Lord Bell, who had previously worked as a media advisor for Margaret Thatcher. And who, according to his biographer, was once convicted for standing at his bathroom window and wanking in full view of passers-by, but that’s another story.

The sting came late in 2011, when reporters from the Bureau for Investigative Journalism posed as clients for Uzbekistan - which has expelled Human Rights Watch, allegedly boiled a religious prisoner to death, and is accused of torturing people to obtain confessions. They approached Bell Pottinger. We’d do well to remember what happened next.

According to the Bureau, the firm prepared a presentation entitled “Changing Perceptions of the Republic of Uzbekistan" outlining a "communications and media strategy” and a “public affairs programme focusing on key members of the government and influential opinion formers”.

One staffer, Tim Collins, boasted about how he’d worked for the Conservatives with David Cameron and George Osborne: “Edward Llewellyn, who's the Prime Minister's chief of staff, was my deputy in Central Office for a long time. Steve Hilton was my deputy in a different capacity. I know all these people. There is not a problem in getting the messages through to them.”  

Then he talked about Search Engine Optimisation: “And where we want to get to [...] is you get to the point where even if they type in 'Uzbek child labour' or 'Uzbek human rights violation', some of the first results that come up are sites talking about what you guys are doing to address and improve that, not just the critical voices saying how terrible this all is.” According to the report in the Independent, Bell Pottinger did make it clear that the Uzbek government would need to put genuine reforms in place if it were to improve its image, before going on to talk about other “dark arts” that could be deployed.

Now, what might these be? Actually, the president of the Human Rights Foundation, Thor Halvorssen, had given us a pretty good idea earlier in the year. In May, Maryam al-Khawaja, a human rights protester, had taken to the stage of the Oslo Freedom Forum and spoken about her experience of government violence within the Kingdom of Bahrain.

Halvorssen later described how: “Within minutes of Maryam's speech (streamed live online) the global Bahraini PR machine went into dramatic overdrive. A tightly organized ring of Twitter accounts began to unleash hundreds of tweets accusing Maryam of being an extremist, a liar, and a servant of Iran. Simultaneously, the Oslo Freedom Forum's email account was bombarded with messages [...] arguing that Maryam al-Khawaja is an enemy of the Bahraini people and a 'traitor'."

According to Bahrainwatch, the Government of Bahrain has spent or allocated at least $32.5m for the services of eighteen different London and Washington DC based companies (including Bell Pottinger) since the start of pro-democracy protests. In that time, 79 people have been killed. Ronn Torossian, owner of 5WPR, described the spend as “a huge amount, sure to influence media coverage, and hence world opinion”.

How quickly the violence in Bahrain highlighted the circles of power and influence in modern Britain, like ripples from a stone dropped in a pond. In February 2011, Bell Pottinger put out a statement saying that Lord Astor of Hever, an undersecretary at the Ministry of Defence, had praised the national dialogue launched by the nation’s King. A Ministry of Defence official immediately denied this was the case.

Months later, it was revealed that Astor was a trustee of Atlantic Bridge, the charity that paid for Adam Werritty to travel the world alongside Liam Fox. The two men had met in - where else - Bahrain, in December 2010. To bring things full circle, Bell Pottinger was revealed to work for Michael Hintze - the hedge fund manager who was Atlantic Bridge’s major backer.

And this murky episode is but one. We’ve since learned how Bell Pottinger had made use of former diplomats to orchestrate the lifting of an EU travel ban on Belarus’ president Alexander Lukashenko, the man dubbed “Europe’s last dictator”. And how Qorvis was working for Teodoro Obiang Nguema, the leader of Equatorial Guinea, to put out cuddly press releases like this - for a man under whom “unlawful killings by security forces; government-sanctioned kidnappings; systematic torture of prisoners and detainees by security forces; life threatening conditions in prisons and detention facilities; impunity; arbitrary arrest, detention, and incommunicado detention” have all taken place.

The likes of Lord Bell, in perhaps the quickest route to Godwin’s Law yet devised, will tell you that everyone deserves representation. It’s an argument that goes back to Sigmund Freud’s nephew, Edward Bernays, who in the early twentieth century pioneered the use of psychology in PR to help market the likes of  Procter & Gamble, Cartier and Best Foods. For Bernays, democracy required the manipulation of the mass mind by media and advertising. Good PR was necessary in democratic society – to show people the correct course of action. Needless to say, this implies a worldview that sees the PR man more enlightened than the masses. In Bernays’ case, this rather falls apart when you learn he used his skills to encourage more women to take up smoking on behalf of the American Tobacco company.

And the laissez-faire argument was rebutted late last year in a letter to the Financial Times from the Public Relations Society of America (£). As its chief said: “We believe every person or organisation has the right to have its voice heard in the global marketplace of ideas. But for PR firms to represent dictatorships that do not afford that same freedom to their own people is disingenuous towards the liberties of a democracy and to democratic societies’ reputations as marketplaces for dissenting ideas.”

Perhaps that’s why, in 2012, our attitude must be: question everything more, not less. If you think the internet has eliminated secrecy, then look at this list of Wikipedia edits said to have been carried out by Bell Pottinger. When you hear a foreign correspondent has visited Syria to see the prisons and embed himself with the government forces, remember how PR firm Brown Lloyd James arranged a profile of Syrian first lady Asma Assad in Vogue magazine in which she was called “the freshest and most magnetic of first ladies,” and had been paid $5,000 a month for that work. Read how they lurked behind the interview. Ask yourself - who’s pulling the strings this time?

And when you wonder why so few are asking questions about all this, consider the fact that a sizeable minority of Tory and Labour MPs come from lobbying, among them Priti Patel, who was at Weber Shandwick; Tracey Crouch, who worked for Westminster Strategy; and George Eustice and Charlotte Leslie - both of whom were at Portland – not to mention, of course, our prime minister. Consider also the fact that the Evening Standard is a Brown Lloyd James contract, as is the Telegraph Media Group.

Perhaps now it won’t be such a shock to hear that when, in April this year, the Public Relations Consultants’ Association rejected a complaint from The Professional Lobbying Company that Bell Pottinger had brought the industry into disrepute, it was barely remarked upon. The PR men might have their own reputations to worry about now – but from what we’ve seen, they’ll manage them – either through influence, or darker arts.

 

Bahraini protestors clash with riot police in Manema. The Government of Bahrain is said to have spent $32.5m on PR firms since pro-democracy protests began. Photograph: Getty Images

Alan White's work has appeared in the Observer, Times, Private Eye, The National and the TLS. As John Heale, he is the author of One Blood: Inside Britain's Gang Culture.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation