Two PR figures — Bill Margaritis of FedEx and PR pro-turned-author Wendell Potter — are crusading for a return of trust in corporate America.

Margaritis, chair of the Arthur W. Page Society, whose guiding principle is “Tell the truth,” told the Institute for PR Nov. 11 that a poll by Frank Luntz for FedEx found almost 40% of Americans have “little or no trust” in “corporate America and 47% have little or no trust in CEOs.

Potter, Margaritis
Potter, Margaritis
Such numbers “have never been worse,” he said.

The Margaritis approach, emphasizing the positive, calls on CEOs to lead the way in bridging any gap between a company’s lofty ideals and actual practice. He calls for the development of “reputational intelligence” which he defines as creating a “holistic approach to managing culture, brand, and reputation and the interdependencies among them, in a multidisciplinary framework with all internal stakeholders at the table.”

Margaritis asks for “good old fashioned truth and candor” and “getting past a mania for control which is simply not realistic in most circumstances today.”

Companies “must teach and empower even junior communicators to respectfully question and probe business practices, standards and proposed actions with their business-side counterparts,” he said.

Potter Lives in Different World

The world of Potter, who we heard for two hours on Nov. 16, the day his book, "Deadly Spin," was published, is a completely different one.

It is almost entirely negative, although the ex-Cigna chief spokesperson does concede that “PR has also been used to great and positive effect for deserving individuals, organizations and causes.”

While the Margaritis speech is mostly abstract, Potter’s book is loaded with facts, figures and individual cases.

His big beef is the soaring cost of healthcare, an issue that is the No. 1 complaint of PR firm owners, according to Rick Gould of StevensGouldPincus (link, sub req'd).

[Annual cost of a mid-level family plan by Oxford, the most popular insurer in New York, reached $25,068 this year. Individual cost is $8,040.
Average Cost of a non-group family plan rose 13% to $52,248, said the New York State Insurance Dept.]

No Recession for Healthcare

The Great Recession that caused untold misery for millions of Americans and businesses was unnoticed by insurers, who had boosted group health plans by 97% for families and 90% for individuals from 2000-2008, which was 3.3 times as fast as the rise in wages and 4.6 times faster than general inflation, says Potter.

The five largest insurers—Wellpoint, UnitedHealth Group, Aetna, Cigna and Humana—had profits of $12.2 billion in 2009, up 56% from 2008.
One result of the high cost of a family plan is a sharp decline in marriages. Only half of Americans are getting married now vs. 72% in 1960, a Pew study showed. A recent college grad with a spouse and children would carry a $25K healthcare bill that has got to be paid by the employer one way or another.

The Obama health plan failed to obtain the government-run “public option” that the president once said was needed “to keep insurers honest,” notes Potter, although he is in favor of the plan as better than nothing.

The plan will force millions to buy coverage by HMOs. The U.S. remains the only industrialized nation without a single player plan.

Front Groups Targeted

Potter’s main target is “front groups.” He says corporate sponsorship is often masked by companies that use their PR firms to “launder” money that goes to the groups. PR firms may not list such groups among their clients if they have a public list of clients at all.

Potter says that if he had his way he would file “felony” charges against groups that mislead the public. He says it is “perfectly legal for them to mislead and misinform.” Those who pay insurance premium dollars often are not aware how some of their dollars are being spent, he says.

Potter decries the simultaneous gain in PR jobs and decline in journalism posts. He quotes a 2008 U.S. Bureau of Labor Statistics report as saying PR people now outnumber journalists by nearly five-to-one—240,610 “PR specialists” to 50,690 “reporter/correspondents.”

UNITY Layoff Tracker said that 45,559 jobs were lost in journalism from Jan. 1 2008 to late 2009—three times the rate of job loss in other industries.

Some estimates are that half the journalists working in 2001 no longer have full time jobs in that industry.

Almost all PR people in the past two generations have gone directly into PR “without first steeping themselves in the hard-and-fast rules of journalist and its ethics,” Potter writes.

Journalists are “Shouted Down”

Potter describes “attack PR,” saying there’s an “unsettling effort to shout down legitimate traditional sources of news” and that “inflammatory, often outrageous rhetoric is used recklessly to inspire anger or even incite violence in an effort to gain financial power. Calculated dishonesty uses the news media as a whipping boy in order to instill mistrust of the ‘mainstream media’ and turn audiences toward alternative, biased ‘news’ sources with barely disguised agendas.”

That comment struck a responsive chord in us since a PRSA Assembly delegate shouted a stream of obscenities at us in front of the Washington Hilton Oct. 16.

We had been barred for the first time from recording or taking pictures of the Assembly or having the assistance we needed since only note-taking was allowed. We were also blocked from the Assembly lunch.

A “Flash Mob” of 20 delegates pressed pens into our hand to signify we were as nuts as John Nash as portrayed in “A Beautiful Mind.”
PR Society press policy can be summed up as: brainlessly nasty.

Potter Laments Lack of Enforcement

Potter, a longtime member of the PR Society, lamented that it dropped enforcement of its Ethics Code in 2000.

A bylaw change this year removed the word “violation” that appeared three times so that no one will expect any sort of enforcement from it.

Ethics board member Bob Frause said the code is “purely inspirational.”

A two-page paper by James Lukaszewski called “Why PRSA Can’t Punish” was published earlier this year. It says, “It is simply wrong to imply or infer that disregarding PRSA Code of Ethics guidelines is a violation of some enforceable regulation that can be punished with sanctions, fines or other forms of coercion.”

Signs of “Front Groups” Given

Potter describes the activities of numerous “front groups” and urges readers to be wary of groups with positive-sounding names that provide no physical addresses on their website nor full details of their sponsors.

Among those cited is the Advancement of Sound Science Coalition which has become the Advancement of Sound Science Center.

It is operated by Steven Milloy, a commentator for Fox News who also runs the Junk Science website.

TASSC was originally funded in 1993 by Philip Morris (now Altria) as a means of fighting smoking regulations.

Some of the numerous other alleged “front groups” are listed below.

This is an issue that will be raised throughout the U.S. in the coming months via an in-person tour by Potter to 25 locations plus a media blitz. His press kit already includes sizable pickups in Time, Newsweek, New York Times and other major media.

One or more of the PR groups should take up this topic—PRSA, Page, Institute for PR, Council of PR Firms or PR Seminar. A committee of PR leaders not affiliated with any group might tackle it.

Potter’s book is at least the ninth one on PR with “Spin” in the title. Some of the alleged “front groups” in Potter’s book are listed below:

American Energy Alliance
Americans Against Food Taxes
Americans for Prosperity
Campaign for American Solution
Center for Consumer Freedom
Citizens Against Lawsuit Abuse
Coalition for Affordable Quality Healthcare
Health Benefits Coalition
Health Care America
National Coalition on Benefits
National Smokers Alliance
Partisan Projects
Stop Too Big to Fail