Clarity Blog

Last Thursday, some poor sap in Yuma flipped a switch and the power went out for millions of Southern Californians. Water systems, which of course are heavily reliant on power, got through the crisis in pretty good shape thanks to lots of emergency drills  – although several water districts had to issue notices to their customers warning them to boil their water before drinking it. That, too, passed.

All this made us think: How do you alert people to a crisis when their TVs, radios and computers are down? On our water Twitter feed, @LPAWater, we tweeted the following answer:

Tweet #1:  How do you notify people of a boil water notice when power’s out so no TV, radio or internet? Answer: Reverse 911, tweets, blast emails,

Tweet #2:  … posted notices, sound trucks, Facebook, police/fire liaison + the usual. Crisis calls for creative solutions.

For more on Laer Pearce & Associates creative solutions to crisis situations, check this out.

Airwaves over the weekend were choked with name-calling, blame and recrimination regarding Standard & Poor’s downgrading of US debt, and the clatter is only going to get louder as stock markets around the word suffer big losses today.

There is no clarity when fingers are stabbing, tongues are wagging and ears are closed.  At times like this, our experience as one of Orange County’s leading public affairs firms tells us to go to the source, and get a sense from there about where the truth may lie. Is the Tea Party’s intransigence to blame? The President’s inexperience? The Congress’ polarization?  Let’s look and see what we find. Here is the statement Standard and Poor’s issued Friday evening:

We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.

We have also removed both the short- and long-term ratings from CreditWatch negative.

The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

The statement obviously has been carefully worded to make general points, not specific ones, so all the pundits have been free to use it for their own ends – which has done little to nothing to put us on a path towards winning back our coveted triple-A.

But let’s take a closer look at what S&P wrote.  Not surprisingly, the words “Tea Party,” “President,” “Democrat” and “Republican” do not appear. Nor do the words “tax increase.”   However, the words “less reduction in spending” do appear, and they appear in the form of a threat: S&P may lower the US credit rating to “AA” if the agreed-to level of spending cuts agreed to fails to materialize (and/or if interest rates go up or fiscal pressures result in U.S. debt increasing). Anyone talking about spending like the U.S. used to hasn’t heard S&P clearly.

The key word in this statement isn’t “spending,” though.  It’s “debt,” so that’s where we should look for clarity. The credit rating agency is concerned that the U.S. is borrowing somewhere around 50 cents of every dollar it spends and wants the U.S. to begin to change that unsustainable debt trajectory.  Revenues from increased taxes could be used to pay off debt, so someone is not out of their mind if they’re talking about raising taxes.  However, recent history tells us whenever DC politicians have raised taxes, they’ve used the revenue to spend more (bad in S&P’s eyes), not to pay down debt (good in S&P’s eyes).

We all know know from our personal finances that cutting spending is the best way to slow the accumulation of debt.  If we haven’t always known it, the last few years of recession has taught it to us, and most of us have tightened our belts. Will the “S&P Shock” help Congress and the President to learn it?

Tylenol’s epic crisis response has finally been trumped.

The decision by Tylenol manufacturer Johnson & Johnson to pull the product from every store in the U.S. after a rash of fatal poisonings in 1982 has stood for decades as the most dramatic response to a PR crisis in history.  On Thursday, Rupert Murdoch leapfrogged past that milestone with a hyper-epic response to the crisis plaguing one of his media properties, London’s News of the World – he closed the paper down.  Forever. One commentator aptly called it “the nuclear option.”

It was hardly like shutting down the Shrewsbury Chronicle.  News of the World is England’s largest-circulation Sunday newspaper. It’s been publishing since John Tyler was president (1843, in case you’re a bit hazy on the term of the president mocked as “His Accidency“).  And for 200 employees, it’s pink slips all around.

The cause of all this, in case you missed it, is the tabloid-titled “phone hacking scandal,” which has lead to the arrest of three News of the World senior staffers on charges of tapping voicemails to get stories – not just the voicemails of wayward politicos and celebrities, but of murder victims and their families as well. Charges also have been made that the paper paid the police for inside information.  Torrid and horrid stuff.

Murdoch defended his action, saying “it was the right thing to do,” and calling the alleged behavior of his employees “inhuman.”  We like that choice of word a lot – there’s no mousing around going on here, as tough words follow grand actions.  But are Murdoch’s actions the right actions?

We think so, for a lot of reasons.

• The News of the World brand has suffered long-term, possibly permanent damage. You can’t repackage a newspaper in ethics-meltdown-proof packaging, so it’s likely most of the publication’s readers and advertisers will go elsewhere.
• The closure allowed Murdoch to claim some high ground as bad stuff was swirling all around him, an artful feat in a crisis. Whether he’ll hold on to the high ground or not will become more clear as details on the extent of the scandal emerge.
• It also took some of the wind out of the hacking story. Yes the story is still there and will continue for some time, but with less ferocity than would have been the case were News of the World still publishing.
• It gives Murdoch an opportunity to build his other London tab, the Sun, into a much larger vehicle.
• And it shows Murdoch to be a man who is truly horrified by what took place under his watch, and one who is willing to take dramatic action to ensure that such behavior will not happen again.

That last point is the one that made the closure decision a go, in our estimation.  After all, Murdoch is in the final stretches of a $12.5 billion take-over of the parts of Britain’s BSkyB satellite network he doesn’t already own, and the character of the acquirer is one aspect regulators consider before giving such transactions the government’s approval.

Sky is a more valuable asset than just another London tabloid, so Murdoch’s move, while dramatic and controversial, was well-reasoned and sound.

We’re just waiting for some news regarding how the 200 dismissed workers will be treated. Little loose ends like that have the potential to do great damage if not handled well.

Osama bin Laden took an immeasurable amount from America, so it’s paradoxical that in his death he actually gave us something valuable – besides the value of the joy we have in him being dead, that is.

The valuable lesson he gave us is this: In the ongoing story of the significant  inaccuracies in the White House account of how the raid was carried out, we see clear justification for the most basic strategy we employ when counseling clients who are in crisis – don’t say anything that hasn’t been verified as true.

In a New York Times article dissecting the communication embarrassments that have dogged the administration since the raid, a military spokesperson is quoted saying, “Everything we put out we really believed to be true at the time.”

And that, in a nutshell, is the problem with crisis communications: What you think is real may turn out not to be real at all.  You think your plant operators followed safety procedures before the explosion, but it turns out that’s just what they said they did and the real picture is something else entirely.  You think the company’s HR policies align with the law, but it turns out the laws have changed. You think your CEO is an upstanding citizen, but it turns out he’s been hiding a securities fraud conviction.

And of course, there are no vacuums in crisis situations that allow for the leisurely gathering of information; instead there’s always a loud chorus of demands for this answer and that statement before this deadline or that broadcast.  Spokespersons are being hounded to provide answers, as the Times article makes clear:

In the view of officials from past and present presidencies, it was a classic collision of a White House desire to promote a stunning national security triumph — and feed a ravenous media — while collecting facts from a chaotic military operation on the other side of the world. (emphasis added)

We in public relations are often frustrated in our desire to respond to the ravenous media because attorneys want to go over every single detail from seven different perspectives before allowing information to be released.  We are right in our desire to get the information out, because the court of public opinion convenes long before any court of law does.  But, as the White House is learning, we’re also wrong when we push out the news too quickly.

In the case of the Abbottabad raid, it’s evident the White House would have been better served by doggedly sticking to a narrow statement, no matter who much the media howled.  The world would have gone on spinning (an action entirely unrelated to White House and Pentagon press secretaries spinning) had the only message to the press corps been, “Osama bin Laden and two or three others were killed in a raid by Navy Seals in Pakistan yesterday. There were no injuries to American forces.  We will provide more details after the brave members of the assault team have been debriefed.”

“I still have no idea what the numbers they are giving about radiation levels mean. It’s all so confusing. And I wonder if they aren’t playing down the dangers to keep us from panicking. I don’t know who to trust,” said [Tsugumi] Hasegawa, crammed with 1,400 people into a gymnasium on the outskirts of the city of Fukushima, 80 miles (50 miles) away from the plant.

Click on image to see Futuba to the northeast of the Fukushima plant, which is marked with an "A."

AP reported that quote this morning, evidencing just how horrible the PR crisis meltdown in the Japan nuclear crisis is. Before the quake, tsunami and radiation evacuation, Hasegawa lived in the town of Futuba, described by AP as “in the shadow of the nuclear plant,” yet the 29-year-0ld mother has not been provided – or does not remember – the information she needs to process the news she is receiving.

Three entities are at fault for this. Tokyo Electric Power Company (Tepco) appears to have not undertaken the community outreach and education it should have, given its responsibility as a corporate citizen to the people near its many nuclear plants.  The second is the Japanese Nuclear and Industrial Safety Agency (NISA), which either didn’t require community education or didn’t enforce the regulations. The third is the media, which apparently is not putting sufficient perspective and explanation into their reports.

In many cases, Hasegawa herself may have been the cause of the communication breakdown.  She may have been the target of meaningful communications, but like so many do, failed to tune in.  This is highly unlikely because Japanese schools, community structures and emergency drill techniques are all top-notch, and further, the quote indicates this has been an institutional failure, not an individual one. It is from Kazuma Yokota, a government nuclear safety official, who was commenting on the failure to quickly respond to the emergency by distributing potassium iodine, which protects from radioactive iodine, to the surrounding communities:

“We should have made this decision and announced it sooner. It is true that we had not foreseen a disaster of these proportions. We had not practiced or trained for something this bad. We must admit that we were not fully prepared.”

And why not? The standard excuse is that no one conceived of a situation this awful, but after Chernobyl, nuclear plant operators should have planned for a serious meltdown and radiation release scenario, whether they thought it would happen at their plant or not.  Has your  neighborhood nuclear reactor operator performed any better?

The AP article also has two other quotes worth noting as we evaluate the crisis communications program the Japanese are struggling, largely unsuccessfully, to implement.  The first is from Deputy Cabinet Secretary Tetsuro Fukuyama:

“We consider that now we have come to a situation where we are very close to getting the situation under control.”

The second is from another government official, Chief Cabinet Secretary Yukio Edano:

“Even if certain things go smoothly, there would be twists and turns.  At the moment, we are not so optimistic that there will be a breakthrough.”

At this point in the crisis, systems should be in place to ensure that a deputy secretary and a chief secretary of the same government are on the same page, but they’re not.  Edano, who said the second quote, may not be as reassuring, but at this point, being believable is much more important than being reassuring, so his message will be more effective than Fukuyama’s.

My experience in Japan – 12 years of it – colors my reaction to the triple tragedy that is unfolding in the country I love and called home for so long.  The earthquake itself was much stronger than any I felt while there, and I went through ones strong enough to empty theaters and drop plaster from ceilings.  I know the area most impacted and have met its industrious and warm people.  It’s disconcerting to think that I once stayed in a pretty family inn in a seaside fishing village that probably now has been washed out to sea.

But it is the third crisis, the ongoing crisis at the Fukushima Dai-Ichi reactor, that has the most potential for tragedy – and also represents by far the largest public relations melt down of all Japan has gone through.  (Note: I use “Dai-Ichi” instead of “daiichi” throughout because it means “No. 1,” and is two words.)

The Japan I knew when growing up was one where the government and the people were in close harmony, and business was mostly trusted.  Certainly, there were opposition parties and big-time political battles and scandals, but the 38-year successful run of the Liberal Democratic Party (which is conservative, despite its name), from 1955 through 1993, indicates a basic trust between the people and government. As for business, there were scandals including particularly damaging environmental ones, but all in all, the Japanese liked the economic miracle brought on by a business community that was in sync and supported by government.

How badly that’s broken down is evident in the wake of Fukushima.

Neither Tokyo Electric Power Company (Tepco), which owns the plant, or the Japanese Nuclear and Industrial Safety Agency (NISA), which regulates it, has been able to win the trust of the people or the media following the accident.  There are lessons in what they’re going through that public relations professionals and government agencies can learn from.

Sometimes You Just Can’t Win

Most obviously, Fukushima Dai-Ichi reminds us there are some crises that simply are not going to be handled well.  These are the cases where spokespeople are powerless to provide timely and accurate updates because no one has it.  In this case, no one really knows what’s going on in the plant because of the complex chemistry of nuclear reactions gone awry, just as no one knows what’s going to happen next because there are so many variables in play, from the success or failure of current initiatives to the way the wind will blow.

Tepco execs perform the mandatory apology bow

The cardinal rule of crisis communications is to not say anything until  you’re sure you have accurate information in-hand.  How can any public information officer hope to do this with any level of frequency and consistency in a situation like a nuclear plant meltdown as challenging as this one?  So, as far as the spokespeople go, we should all cut them some slack and hope their professional lives get better soon.

Radioactive Reputations

But even if they could get accurate information in a timely manner, it’s likely the spokespeople for this disaster would still be having a terrible time gaining credibility because both Tepco and NISA went into the crisis with their reputations seriously compromised. The performance of other Japanese nuclear plant operators also added to their problems.  Here’s a run-down of recent scandals:

• In 2007, an earthquake caused heavy damage to Tepco’s Kashiwazaki-Kariwa plant.  The company said there had been no release of radiation, but later admitted there was a release, including radioactive water spilling into the Sea of Japan.
• Tepco has ordered in 2006 to review all its safety records after it was revealed that the company  had been falsifying records of the temperature of plant coolants since at least 1985.
• In 2002, a number of senior Tepco executive resigned in disgrace after NISA disclosed (far too late in many people’s estimation) that the company had covered up at least 29 cases of cracks and other damage to reactors.  Two Fukushima reactors were included in the scandal.  In 2003, the implications of this case impacted everyone on Japan’s power grid as Tepco was forced to shut down all of its reactors for safety inspections.
• In 1999, Japan Atomic Power was criticized when it took 14 hours to shut down the Tsurugura plant in northern Japan after a cooling water leak.  Later it was learned the level of radiation in this accident was several times higher than originally announced.
• In 1995, there were allegations of cover-up, falsification of reports, and editing of videotapes following a fire at the Monju reactor in central Japan. [Source for bullets here and here.]

Incidents like these weaken not only the credibility of Japan’s nuclear plant operators, but also the regulators at NISA who are supposed to be keeping a watchful eye over the industry.  Because of them, Japan’s nuclear industry and its regulators are going to suffer a long-term, highly damaging meltdown of the public’s trust in them.  The result is likely to be very painful and perhaps even fatal for nuclear power in Japan.  If there’s a way to buy stock in Chinese coal mining, you might want to consider doing so now because Japan may be looking for an alternative to nuclear power soon.

Tired But True

It’s a lesson that’s been around for as long as the spoken word:  There is a heavy cost associated with trying to cover things up.  It has never been more true than now – after all, it took me less than a minute to find the documentation cited above, so how does anyone think they can successfully pull the wool over the public’s eyes?  Even American presidents, the most powerful and protected people on the planet, have learned this hard lesson over and over again, from Grant with the Teapot Dome scandal to Clinton with the blue dress.

For any controversial industry (and really, what industry isn’t controversial at some level?), the decision to cover up is particularly foolish. The Japanese nuclear plant operators should have realized they would not succeed, and should have understood that one day – today – the consequences of their deceit would be very bad indeed. The regulators, if not complicit in the cover-up, should have realized that their oversight systems weren’t working and should have improved them.

Their only option now is the truth, nothing but the truth, and the whole truth, 24/7, even if it means career suicide.  They need to do something comparable to what British Petroleum did when it live-streamed the video images of crude gushing from the broken pipe at Deep Horizon.  The public demands and deserves real-time radiation readings and status reports.  Longer term, the companies need to open all the other plants to similar levels of scrutiny and act quickly, decisively and publicly if there’s any doubt that something might be amiss.

An industry with a good reputation could have weathered this crisis because the people and the press would have a great deal of forgiveness, given the unprecedented severity of the earthquake and tsunami.  Tepco won’t get any forgiveness, however, because it hasn’t t earned it – and your company or organization won’t either if you’re playing Tepco’s game.

As PR pros, of course we’ve been thinking a lot about the demise of the Deepwater Horizon and the ensuing performances by BP, the administration and everyone else who’s trying to make a point out of the mess.

We like the fact that BP is letting us watch the crude gush out 24/7 (today we’re watching the Remotely Operated Vehicle) and we think its dedicated website is an example of state-of-the-art transparency, but we certainly don’t think much of a CEO who says he wants to “get his life back” after an environmental disaster of this magnitude.  His subsequent apology, like all apologies following gaffes of this magnitude, was inadequate.

We think the president should have visited the Gulf Coast over the Memorial Day weekend, so he could have spent a lot of time talking to people who are trying to stop the gush, and the people whose livelihoods are threatened by it.

And, of course, we’re appalled that knee-jerk environmentalist nay-saying is holding up needed efforts to protect the environment, like Gov. Bobby Jindall’s proposal to build off-shore berms.  Cynics among us might even think for a moment that they’re trying to make the disaster get worse so they can use it to leverage future regulatory campaigns.  But of course, that’s just from the cynics among us …

What we find most interesting is the media’s failure to put the disaster – bad as it is – in perspective.  Our friends at Briscoe Ivester & Bazel recently did just that:

The blowout at Deepwater Horizon in the Gulf of Mexico has now surpassed, in volume of oil spilled into the marine environment, the grounding and rupturing 21 years ago of the Exxon Valdez in Prince William Sound, Alaska. So reported the Wall Street Journal and other news services May 28. The nation’s press has run to its morgues to exhume accounts of the Valdez grounding and spill. Forgotten, though, is a much larger spill … Mexico’s Ixtoc I. Ixtoc I was, like Deepwater Horizon, a drilling rig moored in the Gulf of Mexico, in that case about 600 miles south of the Texas coastline. It exploded June 3, 1979 for reasons similar to the Deepwater Horizon explosion. Ixtoc spilled 10 to 30 thousand barrels of oil a day into the Gulf until relief wells permitted the capping of the broken well almost 10 months later. More than five million barrels of oil spewed from the Ixtoc’s broken wellhead into the Gulf during those months. That amount was 20 times the oil spilled in the Valdez incident.

We hope Deepwater Horizon is capped long before it reaches anything even close to the magnitude of the Ixtoc I spill.  That said, when was the last time you read something about the lasting environmental impacts of Ixtoc I?  Have you ever read anything on the subject?  Well, we have. Here’s the final report prepared by the Feds after thoroughly studying the impact of the 11,000 metric tons of Ixtoc I (and Burmah Agate, another spill) oil that hit the Texas coast. The conclusion:

Petroleum residues attributable to the IXTOC and BURMAH AGATE spills were not identified in the surficial sediments of the study area. Analyses of several water column samples did indicate the presence of IXTOC oil in suspended sedimentary material. Shrimp tissue analysis results identified the presence of petroleum in chronic low levels, but only one sample was linked to IXTOC residues.

No direct links, based on fluctuations in benthic community parameters (abundance and diversity) identified in a comparison of 1976-1977 data with 1980 (post-spill) data, could be made with the IXTOC and/or BURMAH AGATE, spills.

In other words, despite all the hue and cry, all the hand-wringing, and all the condemnation of fossil fuel dependency, the long-term effects of a spill 20 times larger than the Exxon Valdez spill led to nothing more than life as usual with marine creatures and those of us who like to eat them from time to time.  (It took us about 23 seconds to find the federal study, by the way.)

Facts do have a funny way of overpowering perceptions, don’t they?  Unfortunately, facts can get as lost as a clump of crude in a sea of emotions.