Editorial Intelligence’s Dominic Fry is the Director of Tulchan Communications; and is involved in the lucrative world of financial PR. He worked for AT&T as head of communications in the UK in 1990. In 1995 he became Communications Director of Eurotunnel.
He recently landed the corporate affairs director post at Scottish Power, three months after being ousted from the role of group communications director at Sainsbury’s. Fry replaced Sue Clark, who left the company to become director of corporate affairs at Railtrack. He had been at Sainsbury’s for four years.
One company that has prospered despite the difficult climate is Scottish Power. Naturally Fry thinks PR plays a key role in the firm’s image ‘provided you act responsibly on areas such as fuel poverty and disconnection’. Smile when you pull that plug on a pensioner.
Indeed Fry places a great emphasis on corporate social responsibility and points to action the firm took following a storm in 1998 that cut off 160,000 consumers, an event so common it’s become part of the community. So how does PR fit into all this, according to Fry: “It’s not about face painting or opening village fetes,” he maintains: “It is bottom line business benefits that I can justify to the board. It’s about long-term partnership at the point of need in the community”—a sort of keep ’em desperate approach advancing towards the ‘Burn, baby burn!’ Enron chant once the portfolio diversifies. Fry also claimed that Scottish Power has the best ‘green’ tariffs in the sector, with big investments in wind farms and hydropower, along with tree planting schemes. And as we all know electricity is so expensive people, particularly the poor, have to cut down: the art is to spin this as some sort of eco-movement while getting people to pay more for less.
Tulchan Communications was founded in 2000 in partnership with Taylor Rafferty, the leading US international investor relations consultancy.
Georgetown University educated, Brian J. Rafferty, the co-founder of Taylor Rafferty Associates (TRA), the ‘world’s largest independent financial communications firm specialising in assisting non-US companies with their ‘cross-border investor relations and capital markets communications’. TRA’s clients include over 60 blue chip non-US companies and represent some $650 billion in equity market value (although we might have to revise that down a bit). Rafferty is on the board of one of the companies they advise, Sonoran Energy along with Charles Waterman, founding member of Jefferson Waterman International, a Washington, DC-based consultancy that advises clients on political, economic and military trends worldwide, as the site puts it:
Waterman has held several leading positions within the U.S. Central Intelligence Agency and as National Intelligence Officer in the Middle East (1963 to 1985), Mr. Waterman coordinated the intelligence input to policy deliberations in the Near East and South Asia. As a member of the Foreign Service, he spent many years living and working overseas in Kuwait, Cairo, Beirut, Amman and Jiddah. A recognized expert in the Middle East and the former Soviet Union, Mr. Waterman has extensive knowledge of the defense and petroleum industries, and has published extensively in foreign affairs journals.
Also one the board is Mehdi Varzi, of Varzi Energy, an oil and gas consultancy, whose carrer spans ‘oil, diplomacy and international finance’. First it was the City of London, with Kleinwort Benson and Varzi:
served in the Iranian Ministry of Foreign Affairs, and was posted to the Iranian Embassy in Ankara from 1977-1981. From 1968-1972, Mr. Varzi served as a Senior Analyst in the International Affairs Section of the National Iranian Oil Company. Mr. Varzi regularly conducts briefings on world oil issues for private and state oil and gas companies and is currently involved in a number of oil and gas projects in the Middle East.
Investor relations is a tricky business. Taylor Rafferty together with Renaissance Capital conducted a survey into big business and found that “Unethical and often illegal business practices and “black” PR campaigns continue to thrive while good corporate governance remains elusive”. Newspapers owned by one rich businessman make up nasty things about other rich businessmen’s ventures, in Russia it’s called “zakazukha”, bought stories in the media, where it is “not always clear who is behind each press attack, or which media channel will be the next to attack”. One thing the survey found was that “the crackdown on Yukos and its jailed founder, Mikhail Khodorkovsky, is hitting everyone hard”. And that quote comes from the Mikhail Khodorkovsky Society website.
Not only do we not know who is behind saying what about who, we don’t know who owns who. For instance with Taylor Rafferty, Corporate Governance News tells us:
Glass Lewis is being acquired by Xinhua Finance. Shanghai-based Xinhua purchased an initial 19.9% of San Francisco-based Glass Lewis in August 2006. Purchase of the remaining 80.1% is expected to close in early 2007. “XF is not well known, but critics are already questioning whether a company assumed to have close ties to Beijing should influence sensitive corporate voting outcomes around the world,” stated the December 15, 2006 edition of Global ProxyWatch from Davis Global Advisors. The newsletter also noted that GL may no longer be perceived as free from conflicts of interest: “Parent XF owns investor relations firm Taylor Rafferty, whose clients are mostly corporates.”
Right — thank god that’s sorted. Amidst all this deliberate confusion PR people have to deal with the problem that if you say ‘Russia’ or ‘China’ to people ideas pop into their head no matter what the provenance of the tale. Back in 2003, when Fry was with Scottish Power there was one word that frightened the bejesus out of investors and the like— one big huge scary word that sent potential clients in the energy world fleeing as if they were being shot at: America. Half of ScottishPower’s electricity business was in the US and according to aCross Border (which has some interesting partners) interview with Fry, ScottishPower bought huge quantities of electricity forward (i.e. in advance) in the market at high prices, after the Federal Energy Regulatory Commission stepped in to sort out the insanity the free market had produced, the price plummeted, leaving ScottishPower with an “enormous liability” to communicate to staff, journalists and investors.
A fractious period followed, during which any news about energy from the US could spook investors. ScottishPower operated in six states, each separately regulated. ‘When you tell a state regulator you want a price increase, a bargaining process goes on,’ says Fry. ‘But many analysts hadn’t understood that the company wouldn’t ever get what it first asked for.’
So, after the company blows away a fortune gambling, Fry used Tulchan, ScottishPower’s agency at the time, to keep an eye on local newspapers in the States before bad news get to Reuters, and then to analysts who would then ‘panic’ about where the dancing ball was likely to fall on the roulette wheel of speculation. Father Fry then councils them on the evils of making a quick buck stating that the path of the righteous man is beset on all sides by the iniquities of the selfish and the tyranny of Federal Regulators:
By anticipating the judgement, having Tulchan providing info and knowing what was running on the wires, we were able to talk to our investors and say: It is a long process that will take six to nine months. Don’t believe what you’re reading in terms of snap judgements.
No: believe the PR company hired by the company to tell you what to think. To use an entirely metaphorical analogy: it is rather like Fry administers Rohypnol to calm the jittery nerves of the analyists strung out on coke. Who can blame people from getting a bit paranoid what with all that Zakazukha being passed around and no one knowing who owns what or who’s behind whatever it is that whoever is up to. It’s as if someone’s trying to confuse us.
Intoxication is a terrible thing and to sort things out Fry has joined the Board of trustees of the Drinkaware Trust. There is no way to avoid irony here because there is something of a drunken boat about the DT’s spiritual mission which is controlled and run by the booze industry itself — it’s a bit like Amy Winehouse and Pete Docherty running a re-hab clinic. Even drawing on insider sources the figures are staggering. Consumers spend £40.8 billion on booze. £14 billion goes to the exchequer each year. 14.5 million people are employed in and around the booze trade. It costs about £20 billion per year (70% of all admissions to A&E are alcohol connected and it accounts for 22,000 deaths per year). According to Marketing Week (January 12, 2006) Marketing and advertising by by the drinks industry is some £600m to £800m. DT’s ‘plan’ is to ‘obtain’ £5 million (in three years). Alcohol Concern wants £20 million a year. Further criticisms of the DT’s strategy emphasise this reliance on industry for funding and argue that an independent body would be a more appropriate mechanism for change. Questions over who should serve on the board of trustees, and how independent trustees can be when receiving alcohol industry money are central to the debate.
The provision of phoney social impact studies by supposedly objective third parties…might that be a recurring theme here?
Hedge Fund Zakazukha — Evil’s Good!
Prior to founding Tulchan, Andrew Grant was a partner at Brunswick Group and consultants Fishburn Hedges. Tulchan advise companies including British Airways, Marconi and Hanson on financial communications in the US market.
As ever there is the penetration of government and between 1996-7 Tulchan’s Andrew Honnor was the Special Advisor to John Major’s government until the 1997 massacre, and has written for the Centre for Policy Studies. He made the news in April 2008::
Andrew Honnor, PR representative for Lansdowne Partners, one of the four hedge funds named by Kaupthing Bank for manipulating the Icelandic market, has denied the Kaupthing´s accusations according to widespread reports in the Icelandic press.
An extremely Private Equity Hedge Fund manipulating shares— why that would be Zakazukha! Didn’t these people read Lansdowne’s website: “the company’s investment philosophy is predicated on generating consistent, absolute risk-adjusted returns.” What more do you want? Run by Goldman Sach’s Paul Ruddock, it has taken to funding the Conservatives. Hedge Funds thrive on market instability and they gamble on failure. From time to time (after the horse has bolted) the financial press will express concern that “some of these speculators have been spreading false rumours about companies in the hope of driving down the share price and making a hefty profit”. As Rhett Butler puts it in Gone with the Wind: “Mah deah, there is much more money to be made in the destruction of civilization than in building it up,” and Lansdowne (which employs Arnab Banerji, a former senior economic adviser to Tony Blair) is the fund mentioned in connection to making a fortune out of Northern Rock and is said to have “coined in $200m by short-selling the bank in September, taking it to its best trading month in history”.
However not everyone is that polite:
“Everybody was at it because it was just so easy,” said Simon Cawkwell, a former accountant and investor who wrote “Evil’s Good,” a guide to short-selling. “I’d say it was shooting fish in a barrel, but it was easier than that. It was just pulling the trigger.”
This also quotes a certain PR person:
Lansdowne Partners, the hedge fund with more than $19 billion under management, began shorting the shares as long as six years ago, said Andrew Honnor, an outside spokesman at Tulchan Group in London.
The Chairman of Kaupthing bank, Sigurdur Einarsson, who was moaning about the Hedge Funds was saying that they “had gone to great lengths to profit from taking short positions in stocks and credit default swaps” and that “these funds systematically contacted the UK media and analysts from UK banks in an attempt to widen CDS spreads and bring down the share price of the banks.”
Perhaps Lansdowne’s Paul Ruddock just happened to let something slip at a trustees meeting at the Victorian & Albert to fellow trustee Marjorie Scardino, Chief Executive of Pearson plc, the international media group, perhaps they hired a PR company. But such strategic communication is Tulchan’s job: “As an organisation, we focus on our one core speciality, financial communications to the capital markets and financial media.”
On Andrew Grant, Tulchan’s founder see EI’s Charlie Burgess.
Fight the Power
‘Seeing is believing’ so one has to admire Scottish Power when it was awarded Business in the Community’s coveted Company of the Year, in July 2002. Fry joined Scottish Power plc in the summer of 2000 and was responsible for the group’s internal and external communications. The workers also have to be constantly reminded how wonderful and loyal Scottish Power is. He also heads the company’s sponsorship and charitable initiatives and its community involvement: the flip side of screwing money out of power cards.
Critics will argue that Scottish Power preys on the poor charging them more for power than those who can afford to pay through direct debit, they will also argue that Scottish Power swindled many customers who managed to free themselves from their clutches with business practices which should have seen the company bosses questioned for fraud — stories here include little children signing forms given to them by con-artist sales people. The link here has a huge list of ‘disgruntled’ customers:
“I have never willingly been with Scottish Power, but somehow over the past 3 years my fuel supply accounts have migrated to them of (apparently) their own accord.”
These pathetic petty moans paint a biased picture where Scottish Power is the only supplier to have decreased its average customer satisfaction score— no wonder most people didn’t even know they were customers. But these critics are crazy — why would an impartial organisation like Business in the Community award them the ‘Company of the Year’?
By one of those odd PR coincidences Fry was also the communications co-ordinator for Business in the Community’s Rural Action programme and sits on the leadership team for that ‘initiative’. In June 2002, Fry led Scottish Business in the Community’s first rural “Seeing is Believing” visit to three communities in the Scottish Borders (the places were people are routinely left in the dark).
Fry tempted fate by pronouncing that: “Everything we do gets measured and my bonus and remuneration is tied to my performance. I don’t think you can justify your seat at the top table unless you are accountable, and you can demonstrate that you are contributing to the business.”
PR of course extends into all manner of areas, self-delusion being one of them, but it always seems to come back to the Emperor’s new clothes, and part of the way companies are dressed up include phoney studies of the impact of what they do and don’t do, according to Fry:
“The social impact study (conducted by Business in the Community’s Advisory Service) has proved essential in taking an objective look at all our work in this area, demonstrating best practice and providing insightful recommendations. The study is of the highest order and will serve Scottish Power’s corporate social responsibility well now and into the future.”
But not that far into the future. Just as he was doing a ‘fun-run’ with some of the other directors, the aptly named Fry was himself disconnected from Scottish Power in 2005. Scottish Power seem to have rolled all their public relations and human resources into one ahead of a bid battle. No point in wasting money.
A Page of lies
Fry is also “the eyes, ears and voice of the public relations industry” with his involvement in the Chartered Institute of Public Relations, he is a member of their Professional Practices Committee which regulates its members’ professional behaviour through a magic ‘Code of Conduct’ and by handing out prizes.
Fry is a trustee of the Arthur W Page society, a PR club for the very, very wealthy. Page’s father was the U.S. Ambassador to Great Britain from 1913 to 1918, the period of the ‘war to end all wars,’ as it said on the medals. A former vice president of AT&T (also a member of the boards of directors of the Chase Bank, Westinghouse, Kennecott Copper, and Continental Oil), he was a founder of the Free Europe Committee, which, among other things, created (the CIA funded) Radio Free Europe. Arthur’s big recommendation was to tell the truth when doing PR, stating the bold motto that:
“…no business has a right to live in a democracy if it bases that right on the practice of corrupting the press.”
Of course not — if the money’s right the press throw themselves at you of their own volition.
Tom Paine once defined democracy in these terms: “a species of demagoguery, wherein clever charlatans, making promises as enticing as they are impossible to fulfill, win for themselves unwarranted power and wealth, persuading gullible people to discard their liberties for a secret tyranny masquerading as public freedom.” And that was in the early days of the USA.
As a collection of assorted truth fabricators the society seems to express incredulity at the existence of Mr Page himself (yeah funny name) stating: ‘There really was a man named Arthur Page. He is not an invention.’ Its President is Thomas R. Martin of ITT Industries, but he probably wasn’t around when the company got rid of Allende and did a lot more than just corrupt the press.
Back in the day Page “was summoned to Washington in 1945 by his friend, Henry Stimson, the Secretary of War. His task, as it turned out, was to prepare President Truman’s announcement of the atomic bomb.” What did he advise one wonders — ‘try not to mention your membership of the Ku Klux Klan’ perhaps. Call Tulchan communications?
The Arthur W. Page Society is also a select membership organization for senior public relations and corporate communications executives who ‘seek to enrich and strengthen their profession’ i.e. themselves. An individual’s company has to have generated at least $2 billion in annual revenues (all honestly obtained) otherwise — like a lot of Scottish Power’s customers you’re left out in the cold.