By Fraser P. Seitel
Henry Ford once famously said, “Never complain, never explain.”
But in public relations, that’s sometimes bad advice if a client has been victimized in print by inaccurate reporting. If the facts are wrong or the accusations unfair, it’s the responsibility of public relations counsel to challenge a reporter to set the record straight.
Sadly, many public relations counselors and the companies they represent are reluctant to mix it up with journalists, even when a story gets the facts wrong.
But the good counselors – the ones trusted by their clients and truly knowledgeable about what their clients do – don’t take inaccurate reporting lying down.
Such a competent counselor is one Jonathan Gasthalter of the distinguished communications firm of Sard Verbinnen & Co. George Sard is one of the savviest PR counselors, and he hires good people. Gasthalter is an example.
When the consultant’s client, the investor David Einhorn who runs Greenlight Capital, became the subject of inaccurate reporting about his critical comments on the stock of Chipotle Mexican Grill, Inc. – Gasthalter intelligently confronted the reporter in question to correct the misinformation.
I know, because I was the reporter.
The original story was inspired by the 21st century phenomenon of short sellers publicly touting their targets, i.e. “talking their book,” usually to an annoyingly-submissive CNBC, which lets them promote their views with little pushback. I was particularly incensed when Einhorn cited a personal “study” that damned Chipotle, a stock he had shorted and I had bought. He won … the stock got creamed … so I wrote a column.
And Gasthalter, as a responsible Einhorn representative, objected to some of my points, which he suggested were “inaccurate.” And he was right about the following:
- I was wrong to say that Einhorn contributed to the settlement involving disgraced, subprime lender New Century; in fact, Einhorn was explicitly excluded. He also didn’t “get in trouble,” as I put it, as a New Century board member.
It is true, though, that Einhorn held New Century's stock for at least five years, initiated a proxy fight with the company four years into his holdings, and the company made him a director in 2006. He abruptly stepped down from that directorship in 2007 when the company's failing business and overly optimistic financial projections were exposed.
- I was also wrong to suggest that Einhorn “was likely long” Chipotle competitor Yum brands when he lowered the hammer on Chipotle. He wasn’t.
But Einhorn was short Chipotle, which he announced at the conference where he presented his “study.”
- I also accused Mr. Einhorn of basing his selection of Yum’s Taco Bell over Chipotle on personal gastronomic preference, rather than analytical study. Gasthalter challenged that conclusion, suggesting that Greenlight reached its conclusions as the result of a “consumer survey.”
However, since this study was “not made public,” there’s no way to independently assess the statistical significance of the research vis a vis Einhorn’s personal Mexican food predilictions.
- Finally, Mr. Gasthalter said I was wrong to say that Einhorn’s “bad mouthing” of Lehman Brothers “greased that company’s skids to extinction;” suggesting that it was a rotten balance sheet, not “bad mouthing” which drove Lehman out of business.
Actually, the bad balance sheet (plus a public relations tone-deaf CEO) pushed Lehman to the brink, and the bad-mouthing by people like Einhorn drove it over.
What’s the point of all this?
The point is that reporters have a job to do, and so do public relations counselors. When a public relations client is wronged, it’s your job to defend his honor, correct inaccuracies or unfairness, and expose the facts.
That’s what Gasthalter did in this case. I may not agree with all his points, but if I were his client, I’d greatly appreciate the way he looks after the people who retain him to represent their interests. |