In early 2014, I received a phone call from Tim Bell – by then Lord Bell – the London PR guru who is still best known as the spin-doctor genius who helped to propel Maggie Thatcher to three election victories and later co-founded the London PR firm Bell Pottinger. Mr. Bell had invited me to interview Dmitry Firtash, the billionaire Ukrainian oligarch who had landed in a spot of trouble with the law, and spent half an hour or so giving me some background on the man.
While we were talking, I couldn't help thinking: Why would you associate yourself with this guy?
Indeed, Mr. Firtash, who made his fortune trading natural gas, would be a risky client for any PR firm. At the time, he was under arrest in Austria and was under an extradition order to face bribery charges in the United States. The then government in Kiev had accused him and other oligarchs of siphoning off billions of dollars from the state and alleged he had held court with some notorious figures, among them the alleged Russian mobster Semion Mogilevich, who was on the FBI's "10 Most Wanted" list. (Lately, Mr. Firtash's named popped up in connection with Paul Manafort, Donald Trump's former campaign manager, who is under investigation by special counsel Robert Mueller.) Mr. Firtash, who is still in Austria, denies all the allegations against him.
I never asked the question but I knew what Mr. Bell's response would be if I had. He always argued that the good, the bad and the ugly had the right to the best defence possible; they were allowed, and expected, to hire the top PR firms as well as the top lawyers. "Everyone's entitled to put their point of view across," he said in an interview with the Financial Times three years ago.
This week, Mr. Bell's philosophy came back to haunt both him and Bell Pottinger, with which he is no longer associated – he resigned as chairman early last year. Good timing on his part. Bell Pottinger is collapsing and might go into administration, a form of legal insolvency, next week. The downfall of the firm, with some 250 employees in London, the Persian Gulf states and Asia, came after it was ejected from the PR industry regulator in Britain, the Public Relations and Communications Association (PRCA), for spectacularly bad behaviour in South Africa.
Since then, a flurry of high-profile clients, including HSBC, Richemont and Investec have abandoned the firm, though Ontario Teachers' Pension Plan may hang in (African Barrick, now Acacia Mining, was a Bell Pottinger client until recently). Chime Communications handed back its 27-per-cent stake in Bell Pottinger for nothing, effectively valuing a business that reported billings of £30-million in 2015 at zero.
Bell Pottinger's sin was stoking racism in South Africa – the PRCA found it guilty of four breaches of its ethics code. The firm was working with the wealthy and powerful Gupta brothers, owners of Oakbay Investments, who are close to South African President Jacob Zuma and stand accused of buying influence with him. The Gupta account, which was won in 2016 with Mr. Bell's input, was reportedly worth £100,000 or more a month.
Bell Pottinger organized a campaign for the Guptas that targeted wealthy white South African individuals and corporations. Civil society groups said the campaign depicted opponents of the Guptas (of which there are many) as "white monopoly capital." An independent report by the London law firm Herbert Smith Freehills backed the PRCA's findings that Bell Pottinger had inflamed racial tensions – race being a rather sensitive issue in South Africa.
Bell Pottinger's wounds were entirely self-inflicted, and its imminent collapse – even Lord Bell this week admitted the company is doomed – holds a key lesson for the PR industry; actually, two. The first is that Mr. Bell's PR-firm business philosophy was bogus. Even if unsavorary characters are entitled to put their own view across, PR firms are best advised to stay well clear of them. The second is that a PR firm should be wary of handing out crisis-management advice to clients that it doesn't follow itself.
On the former, consider some of Bell Pottinger's clients. The list of rogues and baddies have included Asma al-Assad, wife of the Syrian dictator; Augusto Pinochet, the late Chilean dictator; South African Olympic athlete Oscar Pistorious after he was charged with murder; and Belarussian strongman Alexander Lukashenko, dubbed Europe's "last dictator."
Mr. Bell insisted that Bell Pottinger should sell advocacy to anyone willing to pay. But PR firms don't have to take any client with a chequebook. They can choose their clients and Bell Pottinger sometimes chose them using judgment evidently overwhelmed by sheer greed. A few of the clients were the equivalent of live grenades and could have blown up the firm. It was Guptas who did it, and there is no way that Lord Bell or anyone else at Bell Pottinger could claim they did not know the Guptas' reputation before they took on the account (Lord Bell now claims he advised against taking on the Guptas even though he helped to land the account).
PR firms who deal with corporations often include crisis-management plans in the service package. Companies on the verge of meltdown are generally urged to come clean on their sins, eject those responsible for those sins and relaunch the suddenly contrite company under a new team of executives and directors.
Bell Pottinger did none of this. The PRCA ruling did not come out of the blue. The firm had enough time before the ruling to sack the top management and anyone directly involved in the Gupta account. It had enough time to replace all or most of the board members, or at least begin the process of doing so. Instead, it was only James Henderson, the CEO, who fell on his sword. Bell Pottinger insiders who had urged a wholesale cleanup of the firm ahead of the PRCA ruling said their advice was ignored.
To my surprise, not many PR firms have blown up because of vile dealings with vile clients. But lots of firms do have vile clients, because they pay well to have their reputations laundered. I guess it's all part of the game. Bell Pottinger paid the price. So will others, one hopes.
Eric Reguly