All Things Eeeeeee…

Eeeeeeeee as in Enron. This past week, Jeff Skilling, former president of Enron, was sentenced to 24 years and four months, and will soon be remanded to the Federal Correctional Center in Butner, N.C. According to federal guidelines, Skilling must serve at least 85 percent of the sentence before he is eligible for release. If authorities note his good behavior during incarceration, however, he will be eligible to rejoin society when he is 72.

Prior to his sentencing, Judge Sim Lake allowed former employees and shareholders to speak, many of whom urged Lake to hand down a tough sentence. The judge had no choice but to follow federal sentencing guidelines which require judges to consider numeric calculations that take into account many factors, one of which is dollar loss if fraud has been committed.

Skilling's sentencing has turned into a hotbed of debate within the legal community. At issue is whether the sentence is appropriate for a first-time, white-collar offender. Attorneys point to the fact that repeat violent offenders often get less time and are eligible for parole sooner.

I think that with so many lives affected, Skilling should be held to a high level of responsibility. White collar crime affects more people and requires cunning intent. Surely that fits the definition of “evil.” That said, I think the sentence is rightfully severe, and I’m disappointed that Andy Fastow is not being required to serve more than the six years he was given for his role in the undoing of this corporation. Federal sentencing guidelines are meant to be a clear warning to capitalists in this country to control their greed.

I’m not sure if anyone from Enron’s communication or human resources areas could have affected or influenced Skilling. Probably not. But they certainly would have been able to ask the hard questions. To ask the right questions. I think that, more than anything, would have been a huge service to employees under the circumstances. Instead, they took a different road and became management’s “easy speaks.”

More than likely, Skilling will serve his time at the low-security facility near the Research Triangle of Raleigh, Durham and Chapel Hill, along with 1308 other inmates. (But Federal Bureau of Prison officials make the final call.) Visiting hours are: Monday, Thursday and Friday from 2:30 p.m. to 8 p.m., and Saturdays, Sundays and all federal holidays, from 8:30 a.m. to 3 p.m.

And moreeeeee…

Edelman's is still dealing with the fall-out over the failed Wal-Mart “flogging.” I visited Richard Edelman's blog to find out what he had to say about it and especially, what he intends to do about it.

I was very impressed that he took the rap, made no excuses and then asked for suggestions on how to ensure that this doesn’t happen again within his company. He even responded to me with an e-mail in which he acknowledged there was more work internally to do. To that end, he’s brought back Mike Morley, a recently-retired Edelman VP, to act as ombudsman and to speak about ethics to all Edelman offices globally. Edelman is also requiring its employees to attend "Ethics in Social Media" training, hosted by Edelman’s me2revolution team along with outside experts.

I think Edelman is serious about transparency and if that doesn’t start at the top levels of a company, then the company is probably already in trouble. So, an attaboy for Edelman’s for its proactive treatment of this issue.

Question of the Week: Do you agree with Jeff Skilling’s punishment?


Mickey Mouse and The Roller Coaster of Kid-Friendly PR

I’m feeling poorly about my posts which, in truth, have been particularly aimed at poor and unethical PR. I’d like to set the record straight and mention two PR campaigns that are communitarian-based and are focusing on policies that are meant to address a larger picture, doing what’s right for our kids.

One PR campaign was announced this week by
Six Flags Theme Parks,
stating that they are implementing a code of conduct at all its parks.

Six Flags is putting the skids on roller-coaster behavior.

The code is aimed at getting a handle on unruly teens who dress inappropriately, consistently cut in lines and who otherwise bully their way around the parks. Corporate Six Flags has determined that at least some of this behavior is contributing to lower attendance figures by families. I applaud the code because of its communitarian-based ethics. It’s easy for teens to find their way to locations that don’t monitor behavior—and easy for harried working parents to let them. By prominently displaying conduct requirements, Six Flags is sending a message to everyone. The message? We won’t put up with thinly-veiled juvenile delinquent behavior. Now the hard part comes. Six Flags and its employees must be committed to these standards by enforcing them at all 29 of its parks. Only then will teens realize their boundaries and will families feel welcome once again.

The other PR campaign comes from
which also made an announcement aimed at kids.

Disney puts Mickey on kid-friendly diet.

Disney’s theme parks will begin serving nutritionally balanced meals and only make restaurant endorsement deals with chains that limit fat and sugar items on its menus. To that end, Disney ended its 10-year deal with McDonalds. The Disney campaign is a follow-on to the announcement by the Federal Communications Commission that it will study links between ads, viewing habits and the rise of childhood obesity as marketing of food to children is presently unregulated. Disney’s communitarian campaign recognizes the heft that Disney and its characters have on children’s perceptions and Disney's proactive stance is reinforcing the idea that Disney is in a position to make a difference. I like the health-friendly campaign that Disney's undertaken as it considers children’s health over advertising dollars.

I also think that if more companies--whatever the industry or the primary stakeholders--implemented at least some communitarian-based campaigns, we'd see a widespread change in today's corporate culture.

Question of the Week: What communitarian-based PR is your company implementing?


What do Larry Flynt and J. W. Marriott, Jr., Have In Common?

Quite a lot as it turns out. Larry Flynt became a household name after a landmark pornography case was decided by the Supreme Court. In that case, Flynt fought for the right to express pornographic parodies of a public figure (Jerry Falwell) under First Amendment protection. Ever since, he’s become an icon for the pornography industry.

Larry Flynt: The original Hustler

With technological developments, the porn industry has continued to evolve from Flynt’s Hustler parodies to an industry that has been testing placement of an ever-moving line between what is defined as pornographic material and what is not, what is one’s right to express and what speech is not acceptable to express. The fact that pornography, the hard core kind, is widely available has helped the industry become socially acceptable. Don’t believe me? Well, when captains of industry, corporations like AT&T, Yahoo!, Direct TV and Marriott International, begin to accept your wares, can Wall Street be far behind?

While Marriott, Jr. hasn’t gone to court on his offerings of pornography, let there be no doubt that Marriott is a part of the porn business. They have inked a deal that allows their hotel guests to order up pornographic movies. In return for this use of airwaves, Marriott gets to keep a percentage of the cost of each movie purchased.

Of course, their PR folks water this down. Marriott’s PR gurus want us to believe that since they don’t make these movies, and since they don’t watch these movies, that their chain is upstanding and respectable. They say Marriott is merely making these movies available because their customers demand them. So, how much demand is there for pornographic movies in motels? That seems to be a closely-guarded secret. In other words, Marriott, Jr. isn’t telling what his take of the porn pie is, although expert guessers have pegged it at between 70 and 80 percent of all in-room profits. And that can add up to a rather large amount of qwan.

J.W. Marriott, Jr.: Just another hustler?

On the contrary, on Marriott’s Web site, you can find out that Marriott, Jr. is an active member of the Church of Jesus Christ of Latter-Day Saints, that he has four children and 12 grandchildren. You can also read that Marriott supports the community through various programs.

In all this hubris you can even find Marriott’s commitment to engaging women-owned businesses to supply key products and services.

Something is terribly amiss here. I think in a period when we, as a society, have experienced grotesque killings of young girls—of our nation’s young women—that Jackson Katz is onto something. I think it’s time—past time—to open a dialogue about the increasing acceptability by men in our society of pornography and to take a hard look at what this means for us—for all of us.

James B. Weaver, Professor of Communication and Psychology at Virginia Polytechnic Institute & Technology, reported on research into how pornography is affecting our society. Among other things, his testimony before the U.S. Senate Committee on Commerce, Science and Transportation revealed the following:

• The marriage between pornography producers and corporate America has served to legitimize pornography to millions of Americans.
• Pornography reinforces the message that women exist merely for the gratification of men.
• Pornography is affecting the sexual socialization of our society’s teens.
• Social science studies—conducted for more than 20 years—have consistently shown that watching pornography negatively impacts our most basic attitudes, beliefs, and values about sex, intimacy, and family.

What this means is that pornography facilitates sexual aggression and fosters misogyny, the very point that Katz made.

I need to mention here that one hotel chain, Omni, had the courage to implement a no-porn policy. And that hotel has consistently been ranked by J.D. Powers as top of the heap in guest satisfaction among upscale hotel chains. That award, given in July 2006, debunks the notion that Marriott (and all other major hotel chains) cannot be a hotel of choice without offering pornography as an in-room amenity.

Like Katz, I believe that until these other hotels begin to consider a communitarian perspective, our society will continue to wrestle with these kinds of misogynistic crimes.

And at some point, Marriott, Jr. needs to wake up and ask himself, “Is offering pornography worth it?” And I’m going to suggest that the answer is not to be found in a thinly-veiled bribe to women-owned businesses to become partners with a corporation that, while doling out money to women from one hand, is raking it in off the backs of women with the other.

Question of the Week: Is it ethical for Marriott International to offer pornographic movies and then offer business contracts to women-owned businesses?


Blowin' in the Wind

Bob Dylan singing new song for CEOs?

The post-scandal laundry is still being put out on the line to dry as far as two high-profile California companies, Hewlett Packard (HP) and Apple Computers, are concerned.

I think it’s worth taking a closer look at the actions of these companies' top dogs to get a handle on the public relations’ ethics involved.

Ex-chair of Hewlett Packard, Patricia Dunn, was indicted this week by California Attorney General, Bill Lockyer. Her improper judgment in a board-authorized investigation led to her separation from HP. After this, Congress subpoenaed her to testify before an oversight and investigations subcommittee of the House of Representatives’ Energy and Commerce Committee. Although she could have refused to testify, as HP’s ex-counsel Ann Baskins chose to do, Dunn participated fully and, in her testimony, she made several recommendations to the committee on the issue involved, pretexting.

In deconstructing her actions, I see both utilitarian and communitarian threads woven in HP’s pile of clothes. For instance, her launch—albeit zealous—of an investigation of the board was motivated by her desire to protect the company, to “circle the wagons,” believing that finding a news leaker would protect HP’s proprietary data and thus, their position in the market. Once the actual circumstances of the investigation popped to the surface, however, the question of the methodology’s legality became a prime topic in the news. The company issued press releases that announced it was internally investigating the methods used.

However, Dunn ended up resigning from her chair position and from the HP board. Both resignations were utilitarian-based—again, protection of the company and doing what was in the best interests of HP. However, I see a shift in her perspective, beginning with the decision to testify before the committee. She made several recommendations to Congress in her written statement and in her testimony on the issues involved in pretexting, demonstrating the essence of communitarianism. Had she, like Baskins, chosen not to testify, then she would have been acting from a utilitarian base. The fact that her testimony may have caused Lockyer to issue indictments against her—and not Baskins—is truly ironic and, if this is the case, truly pitiful. If you believe her sworn testimony, Dunn has consistently said she relied on Baskins and Kevin Hunsacker, HP’s ethics counsel, for legal advice. A CEO is, after all, only as good as its company counsel.

The other honcho involved is Steve Jobs who has publicly admitted that he knew about options backdating at Apple. Besides being investigated by the SEC, the company conducted a three-month internal investigation, finding 15 instances of backdating between 1997 and 2002. Jobs has taken the unusual step of issuing a public apology for the illegal accounting at his company. And, very quietly, the company let go its CFO, Fred Anderson, and its chief counsel, Nancy Heinen—who promptly hired two criminal defense attorneys. Jobs’ actions seem, at this point, utilitarian-based. I suspect that not only is his purpose aimed at protecting Apple, it’s also aimed at protecting him. Although Wall Street analysts have been quick to breathe a sigh of relief, I don’t believe the public—or the SEC—is that ready to overlook his passive acceptance of the practice—so what that he bequeathed us the iPod? Already shareholder advocates are saying this is not the end of his culpability.

Given the special precedence of Dunn’s indictment, and the fact that several other CEOs have been indicted for options backdating, we’ll see how this plays out. But regardless, I firmly believe that Dunn actually thought she was doing the right thing in a legal way, and I know that Jobs allowed the wrong thing to be done in an illegal way. Which is to say, I don’t think that all Apple’s dirty laundry has yet been washed.

The results of these two scandals could mightily affect future public relations models which, at present, tend to respond quickly and transparently to all stakeholders. If, however, by doing so, CEOs become a target for legal actions, greater pressure will be brought on PR professionals to keep a company's doings in the dryer, away from public scrutiny. After all, how long do you think your career would last if your advice leads to your company's CEO blowin' in the wind?

Question of the Week: Do you think that Steve Jobs should resign based on his knowledge of options backdating?

Linda@the saltlick