Hatchet Man

So who are Bell Pottinger and their founder, Lord Tim Bell? When he was still known as Mr. Tim Bell he was the swashbuckling 80s PR superstar who masterminded three election victories for Margaret Thatcher in the UK and a man who is no stranger to scandal – his own or someone else's.

Undercover Sting

Unfortunately for Lord Bell, this time the aging strategist must draw on his crisis management skills to aid his own company. In December, Bell Pottinger, a PR firm founded by Bell, found itself the victim of an undercover sting operation by the Bureau of Investigative Journalism (TBIJ), a non-profit organisation based in London's City University.

The journalists posed as investors seeking better relations between Uzbekistan and the UK. The undercover reporters described themselves as being members of the fictitious Azimov Group and claimed to have close links to the government. Initially they approached ten London PR firms seeking their assistance in lobbying for support. However, given the country's reputation, several companies did not respond to email inquiries. Two companies, Morris International Associates and Ogilvy PR, declined to pitch for the account. Uzbekistan is a dictatorship with no respect for human rights or freedom of speech, that crushes any opposition ruthlessly. It has been described by former British ambassador Craig Murray as a “fascist regime” and a “kleptocracy.” Two alleged Islamic extremists were even boiled to death there in 2003. The countries large cotton farming industry routinely employs child labour and as a result is subject to EU trade restrictions.

Bell Pottinger, who acted for the repressive Belorussian state and its dictator president Lukashenko (whom they assisted in the lifting of an EU travel ban) had no such qualms. Additionally, Bell Pottinger have worked for the Egyptian Ministry of Information and Bahraini Economic Development Board. Both groups have been linked with repression, torture and the shooting of civilians during recent protests.

They were prepared to meet and were secretly recorded pitching for the account. During the pitch BP boasted of its ability to influence the government, saying that on behalf of manufacturer Dyson [a manufacturer of vacuum cleaners] it had persuaded Prime Minister David Cameron, within 24 hours of a request, to raise the issue of counterfeiting with the Chinese premier Wen Jaibao when they met in June, which he did.

The journalists were also told by the lobbyists that “we have all sorts of dark arts” and that they were able to 'sort' wikipedia articles and manage Google searches so as to eliminate unfavourable facts from the first few pages of results.

Chairman David Wilson boosted of the company's links to the Royal family as well as politicians, suggesting he could organise a Royal tour, possibly by Prince Andrew. “This is certainly a £100,000-a-month campaign, to make it very effective” he suggested. When asked “Do you need to know who is paying us?” by one of the undercover journalists he replied, “I do understand that. In our work for Belarus, nobody knows who paid us.” Mr. Wilson also said during that meeting that Bell Pottinger were “being funded by a – shall we say – a rich benefactor who had key interests in Belarus.”

This statement was later contradicted by Lord Bell himself who told the Independent (the UK newspaper that covered the story in conjunction with the TBIJ). “All invoices were sent to the Belarus government and all payments were received from the Belarus government ... What David Wilson said was not true, I have no idea why he said it.”

This is a serious matter. Since Bell Pottinger's parent company Chime Communications plc is listed on the stock market, it must be able to provide an audit trail showing who contracted it and who paid it. The company's share price fell 6% over the week the allegations first appeared, from 178p to 167p. Lord Bell has subsequently announced Chime will be holding an internal inquiry on the matter. He has also made a compliant to the British Press Complaints Commission, an independent body which administers the system of self-regulation for the press in the UK.

David Wilson of Bell Pottinger did email following the meeting to “recheck that the government of Uzbekistan is indeed committed to a reform agenda on various policies including child labour, human rights and democracy, all of which will be vital components in us being able to deliver a successful campaign.”

But despite this emphasis on the importance of reform, if Uzbekistan's image were to be improved, it seemed that reforms need not happen too fast. Managing Director Tim Collins said that “No-one is suggesting it would be realistic to say tomorrow the problem will disappear” and suggested a timescale of 10-20 years. Former diplomat and Bell Pottinger executive Sir David Richmond explained that “it doesn’t matter so much the slowness of the process, though it shouldn’t be glacial, but it’s the progress rather than the speed of the progress.”

The firm also revealed during the meeting that it had undertaken a £3m a year contract with the Sri Lankan government, who had been engaged in a controversial war with the Tamil Tiger rebel group, writing a speech for the President that was delivered to the UN General Assembly in 2010. During this contract, Adam Werrity, a friend of the then UK Defence Minister Liam Fox, attended meetings with the Sri Lankan government hosted by Bell Pottinger. Werrity's purporting to be an advisor to Dr. Fox and attending meetings at which protocol should have precluded him later led to the resignation of the minister.

Regulation

Whereas in Germany Bundestag lobbyists must register on a list that is published in the Bundesgesetzblatt [Federal Law Gazette], in order to gain access to government officials and politicians, or the US, where lobbists working for foreign governments are legally obliged to register with the Federal Government, there are no rules or regulations governing lobbying in Britain.

As a result, the UK is increasingly, and controversially, seen as the global centre for so-called 'reputation laundering' whereby countries with image problems relating to concerns over human rights, democracy and corruption look to PR firms to rebrand themselves. Given the limited growth prospects in more traditional sectors, energy and mineral rich nations with money and dirty laundry to wash are seen as a crucial and growing segment of the UK's £7bn industry. Countries such as Kazakhstan, Yemen, Bahrain, Egypt, Libya, Syria, Sri Lanka, Saudi Arabia and Rwanda are all represented by London PR firms.

Bell Pottinger's founder, Lord Tim Bell told Bloomberg: “I see this as a significant area of growth but I don’t know when; it will take time. As countries rebuild, people will start to invest money.”

Lord Bell was also one of the founders of the advertising agency Saatchi and Saatchi in 1970. By 1981 it was the biggest advertising company in the world. Aside from his work with the Conservative party during the Thatcher years, he was also responsible for media strategy during the contentious dispute between the government and the coal miners during the strikes of 1984. In 1985 he became deputy chairman of the Lowe Group and led a buyout of Lowe Bell Communications in 1989.

The company was later renamed Bell Pottinger and in 1994 Chime Communications, a new holding company that owned Bell Pottinger and a number of other subsidiary companies, was floated on the stock market. A colourful character, he has a conviction for flashing in 1977 and has never denied allegations that he used cocaine between 1978 and 1983.

As Margaret Thatcher's political advisor from 1978 to 1990, he enjoyed a close and friendly relationship with her and upon her recommendation was knighted Sir Tim in 1990. He took the opportunity to build up excellent relations with a number of Conservative politicians and was moving in exulted business and social circles. Bell Pottinger maintain close links with the Conservative Party, with a 'revolving door' for staff between Bell's companies, government, the party machinery itself as well as organisations close to the party. His ability to win friends amongst both parties is reflected in the fact that he was ennobled as Baron Bell, of Belgravia in the City of Westminster in 1998 under Tony Blair's administration.

Reputation

That same year PR Week asked senior industry figures who they thought constituted an ambassador for the industry. The then Cohn and Wolfe managing director Martin Thomas said of Lord Bell “I don't always agree with the way he does business, but in terms of profile he's head and shoulders above the rest.” Remarks that chimed with the then Edelman managing director Tari Hibbitt who said of him “In terms of profile I suppose one has to say Tim Bell. But I'm not convinced I'd consider him to be the ideal ambassador.”

Bell Pottinger were in the news towards the end of 2009 when they handled Trafigura's PR in the wake of 69 African's being hospitalised, and around 15 allegedly killed, as well as thousands left in need of medical attention, by its dumping of toxic waste off the coast of Ivory Coast. Furious efforts were made to suppress the report of the UN Human Rights Special Rapporteur Professor Okechukwu Ibeanu who criticized Trafigura for “stifling independent reporting and public criticism.”

The heavy handed work of Bell Pottinger and law firm Carter-Ruck, to suppress the reports findings backfired spectacularly, resulting in an enormous amount of negative publicity for the hitherto relatively anonymous oil trading firm.

When in 2006 the UK Serious Fraud Office launched an investigation into allegations of bribery by defence contractor BAE Systems to secure contracts, Lord Bell took action to assist his longstanding client. He drew attention to the potential economic damage to the UK economy if future contracts with the Saudis were cancelled. Tony Blair eventually intervened to halt the investigation on national security grounds.

More recently he has been reported to have been working for Rebekah Brooks, former New International Chief Executive who resigned in the wake of the UK's phone hacking scandal. She is seen by some as a possible successor to Chairman Rupert Murdoch when the 80 year old media baron finally retires.

Lord Bell's group remains the most successful PR operation in the UK. Profits for 2010 were up 14% to £21m, on revenues of £299.8m. Chime owns a plethora of PR firms as well as advertising firm VCCP, which has an office in Berlin. The company has 35 subsidiaries and about 1,250 employees. It had 1,494 clients in 2010 with 52% of its income coming from international campaigns.

As a result of the Uzbek sting operation, these allegations are front page news in the UK. Rejecting the notion that any wrongdoing had taken place, Lord Bell however has said that “There is absolutely no suggestion of any impropriety.”

Nevertheless such was the nature of the allegations and the amount of attention they received, particularly in respect of the claim that the Prime Minister had been persuaded to intervene on behalf of a Bell Pottinger client by the firm's Tim Collins, who was filmed saying as much, that David Cameron's office was forced to issue a statement – “It simply is not true to say that Bell Pottinger or indeed any other lobbying company has influenced government policy.” The government later backtracked, saying instead that “We listen to their concerns and where we think they have legitimate concerns and we can help, we try to do so.”

Melanie Newman of the Bureau of Investigative Journalism who broke the story told PR Magazin “David Cameron promised to shine the light of transparency on lobbying. Yet a department of his government has refused to release details of communications between ministers and Bell Pottinger under the Freedom of Information Act on the grounds that this could compromise the firm's commercial interests. A promised consultation on the introduction of a statutory register of lobbyists and their clients has been delayed and delayed again, and there have been repeated suggestions that this is due to lobbying by the lobbyists, some of whom aren't at all keen on disclosure.”

She pointed out the hypocrisy the government has showed on the issue, “Some ministers aren't that keen on disclosing their meetings with lobbying firms either - look at Eric Pickles' [government minister with responsibility for communities, including planning] insistence that his dinner with Bell Pottinger at the Savoy was "private". This is after Mr Pickles sounded off last year about how lobbying undermines democracy: I hope the Bureau's investigations spur Mr Cameron to make good his promise and prompt his ministers to reconsider their relationships with lobbyists.”

Ironically, the Prime Minister, a former PR man himself, said in 2010 that he was afraid that lobbying “was the next big scandal waiting to happen.” There is a voluntary code of conduct but Bell Pottinger has not agreed to it. Further regulation has been discussed but no concrete proposals made. The Public Relations Consultancy Association (PRCA) to which Bell Pottinger belongs has received a formal complaint from another member firm in respect of the allegations. In December, Bell himself fired his big guns against the research methods used by the undercover reporters.

Now there is to be a UK parliament official inquiry into the lobbying industry to which Bell Pottinger executives are likely to be required to give evidence.

For investors, the latest scandal at Bell Pottinger comes at the wrong time: Following on from information published in the Guardian newspaper in November which lost the agency a large U.S. government account – "sooner than expected, "as Bell admitted. This was for managing PR for the American Foreign Ministry in Iraq and in other crisis regions. According to the Guardian, the agency should immediately cut jobs and reduce costs. Profits will be lower than expected. The share price has fallen around 44 percent since the beginning of June this year (as at 22 December 2011).
Concern remains about the chatoyant Lord for another reason too. In January last year, Bell underwent a triple bypass operation. The ailing PR professional, who opens doors for the company to world leaders like no one else - has always been a valuable asset to his agency, the Guardian wrote after the announcement of the current scandal. For Chime, however, the 70 year old is potentially becoming more and more the weakest link.