So As I Was Saying . . .: My Somewhat Eventful Life (37 page)

And, needless to say, the
Times
flatly refused to retract so much as one word, even when confronted with official evidence that MacArthur’s account was totally false. Reuters news service,
The Washington Post,
and the news columns of
The New York Times
as well as the American embassy in Kuwait verified numerous examples of babies being removed from incubators by Iraqi soldiers and left to die. In addition, the world’s premier private investigator, Jules Kroll, was engaged by the government of Kuwait to track down looted assets, and the final Kroll report clearly established the truth of the claim, and the Pentagon reported some 120 incubator deaths. That Iraqi soldiers removed babies from incubators during their occupation of Kuwait has been established beyond doubt.

Unfortunately, an often-unattractive fact about the news media is that charges like this, once made via a “trustworthy” source, tend to stick. Citing evidence against a column like McArthur’s, as I do now, tends to sound defensive and to add to the overall sense that with all the attention he must be saying
something
important. It’s just the way the process works: Once an individual or a company (in this case, our public relations firm) is in the headlights and (to mix metaphors) the pit bull of scandal-by-accusation has locked it in its jaws, there may be no option other than to shake free, walk away, and hope that people forget in time—all the while quietly documenting the truth in as much detail as possible and making it available.

*   *   *

Here is a second public relations story: Ray Donovan, Ronald Reagan’s first Secretary of Labor, ran afoul of the New York district attorney and wound up indicted for fraud. It seems his company, Schiavone Construction, might—or might not—have fudged the New York equal opportunity laws by creating a minority firm to receive the requisite share of the profits from a subway contract. There was little evidence against Donovan. Most of it was from excruciatingly dull accountants, who shared with the jury endless technical data and expert opinion designed to prove that the minority firm was really a front for Schiavone, all of which was denied and countered by skilled and equally dull financial experts for the defense.

Because Donovan was a New Yorker—and a Reagan cabinet member—the local New York press covered the trial intensively. Every day, reporters were in the courtroom, and so, every day, my colleague John Berard or I would brief the press after the day’s testimony and arguments of counsel and give them our analysis from the Donovan side. And our message was clear: “This is an argument between groups of accountants who talk in highly technical terms none of us can understand. Would you send a guy to prison based on an accountant’s expert opinion? Especially when there’s another expert ready to counter that opinion with one of his own?” We made that argument, in one form or another, every day to the press, and a lot of our view was then conveyed to their readers and, we hoped, to the jurors.

After a short deliberation, the jury came in with an acquittal on all the charges, and several of them told reporters Donovan was the victim of accountants; the whole trial, according to one juror, was an argument between accountants. We cheered up Donovan, who worried that his reputation had been tarnished forever, and he followed our advice by asking, loudly and clearly, at his post-trial press conference in the courtroom, “Where do I go to get my reputation back?” I think his reputation was at least partially restored, and the line has become part of America’s political lore.

*   *   *

A third example: A situation at Stanford University was one of the great examples of how media focus on the sensational will later wither away when the facts are in and it turns out the charges are false and the evidence nonexistent. It seemed some wannabe whistle-blower in the university’s accounting department had decided Stanford was cheating on its government contracts by loading into the “Overhead” category all kinds of things that didn’t belong there. His specific charges related to household items at the home Stanford provided for its president, but the real shocker—the headline grabber congressional investigators had latched onto—was a university yacht. So Stanford and its properly celebrated attorney, Jim Fitzpatrick of Arnold & Porter, came to Hill & Knowlton—specifically, to me, because Jim and I had worked together successfully in the past. On his recommendation, Stanford signed on, and I met the university’s president, Don Kennedy. Don had served in government—as head of the Food and Drug Administration—he was a serious possibility as the next U.S. Senator from California, and he’d been an extraordinarily good president of Stanford. He and I became, by the way, good friends and remain so.

In almost any forum, Stanford—and Don Kennedy—would have been cleared in a day or two, maybe even in an hour or two. The evidence about the overhead claims was dubious at best, if complicated, but once fully set forth, it was easily explained and quite proper accounting. The “yacht” was a sailboat used by the university’s sailing team. It properly should have been expensed to the sports budget and not the overall university’s—an easily corrected error of a few thousand dollars and not the “millions” claimed by the whistle-blower. But it was promptly labeled a “yacht” by
The Washington Post,
which then seized on the “scandal” and hardly relented until a few years later, when final judicial rulings demonstrated Stanford’s—and Kennedy’s—innocence. By then, due to the congressional investigating committee’s one-sided treatment of the evidence and the chairman’s daily denunciations at the hearings, Kennedy had been forced to resign, and the story could be safely relegated to the back pages. But those back pages, at least, made it clear that Stanford, in a multimillion-dollar annual budget, had only erred technically on a few items.

The Stanford matter did yield one vastly interesting sidelight. The accountant who had accused Kennedy had uncovered another overpayment to “Overhead”—an “Italian fruitwood commode” for several hundred dollars. Investigators seized on the item because, they said, everyone knows an Italian fruitwood toilet is a wildly unnecessary item and a sign of unbridled luxury. I dimly recalled my mother—a Baltimore girl—having referred to an end table in a bedroom as a commode, so I turned to an extremely valuable set of reference books—the
Dictionary of American Regional English,
a remarkable set of volumes that included maps to show, for instance, where in the United States a particular piece of furniture was called a sofa, and where a davenport, a settee, or a couch. Sure enough, “commode” meant toilet in some areas and an end table almost everywhere else. A few words to the media, and the “Italian fruitwood commode” vanished as an issue.

*   *   *

A fourth: In the pure lobbying arena, nothing was as satisfying as representing the credit unions a few years ago in a titanic—and crucial—battle with American banks. At the behest of the banking industry, the U.S. Supreme Court in 1998 had decided that the operating statutes provided a very limited role for credit unions in the nation’s financial alignment. These “hometown, family-run banks” had originally limited themselves to the employees of a particular company or other institution, and if that entity went out of business or moved to another state, the credit union went out of business, too. But as time went by, credit unions expanded, often to cover an entire industry or a geographic region.

Credit unions had a great advantage: They were owned by their depositors, not by distant investors or directors. With no profit objective, rates were cheaper, and, more important, low-level loans were available where they were not at banks, which could be expected to turn up their noses at a request for, say, a loan of a hundred dollars to finance an additional used lawn mower for an emerging landscaping business or a sewing machine for an enterprising seamstress. Small loans, and small balances, were often the rule of the day at credit unions. So when the Supreme Court held that expanding credit union membership beyond the original limitations had been improper—although compliant with existing regulations—disaster loomed for the eleven thousand or so credit unions in the nation.

They turned to Hill & Knowlton to spearhead a change in the law to, in effect, overturn the Court’s decision with a new statute, expressly allowing—indeed, encouraging—virtually unlimited membership. It was a classic mainstream grassroots organizing campaign, and I made the point wherever I could that we were “sure to win” because the credit unions had more than 70 million
members
and the banks had none. That meant we could—and did—organize visits to all key congressmen and senators and buttress the good arguments with the statement “Congressman, there are precisely 17,384 credit union members in your district, and this issue is important to them.” Excellent de-Keatingization, come to think of it. The results were more than impressive; the vote in favor of the credit unions in the House was 411–8, and in the Senate, 92–6.

*   *   *

A fifth example: The client was a group of Dutch insurance companies, some of which had acquired leading U.S. insurance carriers and were beginning to get involved in a huge European fight over Holocaust-era life insurance policies. It seems thousands—maybe hundreds of thousands—of Jews and other victims of the German extermination camps had taken out life insurance policies with European companies—mostly German, Italian, French, Swiss, and Dutch—and for fifty years they or their heirs had been stiffed when they’d asked for payment. Many of the German companies had been so brazen as to deny coverage because the heirs of men and women who died in the camps could not produce death certificates or because the records showed the policyholders had “stopped paying the premiums sometime in 1942 or 1943.”

This scandalous situation had come to the surface in the 1990s along with the revelation the Swiss banks had refused to reveal Holocaust accounts (and indulged in other collaborations with the Nazis). The World Jewish Congress played a leading role in agitation, chiefly within the United States, on these subjects and put its considerable media skills behind an effort by state insurance commissioners and some congressmen and senators to create an organization to be called the International Commission on Holocaust Era Insurance Claims. Officially authorized (and funded) by Congress, the commission was to be composed of some state commissioners, most of the European companies, representatives of Israel, and members selected from Holocaust survivors’ organizations. Acronymically named ICHEIC, it was formed in 1998, and its first (and, as it turned out, only) chairman was the distinguished former U.S. Secretary of State Lawrence Eagleburger.

ICHEIC is now disbanded, having disbursed close to half a billion dollars, mostly to claimants, and entered into binding agreements with all of the recalcitrant companies. It was able to do this work primarily because it did not depend only on ordinary rules of evidence and was not hamstrung by the “absence” of documents.

At the time, the Dutch companies thought themselves exempt from the purpose of ICHEIC and the pressures it placed on their colleagues from Germany, France, Italy, and Switzerland to pay Holocaust-era policies, the proceeds of which had been withheld for around fifty years. The Dutch, to their credit, had paid 98 percent of their Holocaust-era policies by a few years after the end of World War II and had created an organization of their own, the Sjoa Foundation (created by and composed of insurance companies and representatives of the national organization of Dutch Jews), to pay the remainder. My advice to the Dutch companies—fearful of being tarnished with bad publicity—was “Join ICHEIC.” The cost was minimal, and they could keep a watchful eye on their reputation.

Eagleburger, with whom I was friends from our work together regarding Cuba, was by now well into his seventies, but his physical condition made him appear much older. He walked with difficulty, almost always with a cane—sometimes two crutch-type sticks, which he manipulated with great skill—but as one observed him in action, one quickly saw that he was positively death defying, as I once told him. He regularly presided over ICHEIC plenary meetings, which consisted of close to fifty people, each with his or her own microphone, representing state insurance commissioners, Israel, five or six European insurance giants, two or three Holocaust survivor organizations, and often an official observer from the Department of State. And Eagleburger, as he moderated and often vigorously participated in the debates, held a breathing-type inhaler device in one hand and a lit cigarette in the other. “I’m a smoker, because I enjoy it,” he told me once when I commented on the odd sight of someone alternately smoking and artificially breathing, “and I use the inhaler so I can continue to breathe.” Hard to argue with that.

Larry had a short temper. Never with me, although that might have surprised some of the ICHEIC members fooled by his constant, but fake, criticism of me and my “radical, wildly leftist” ideas. Indeed, the Dutch were always his favorite members, and Eagleburger never failed—often in writing—to praise my clients as the only European insurance entity to pay its debts on time to Holocaust victims and their surviving heirs. Still, his temper led him into occasional difficulties.

Eagleburger’s wife, Marlene, attended all the meetings of ICHEIC and spent the time knitting, until I advised her of the dangers of comparison to Madame Defarge. She was, however, responsible for one of the more memorable examples of chaos at an ICHEIC meeting. It occurred, as I recall, sometime in the third or fourth year of the organization’s existence when Larry, driven just beyond his level of tolerance by the acrimony among the insurance company representatives (especially the Germans), the Israelis, and the survivor representatives, abruptly resigned when the criticism of ICHEIC turned into criticism of him. He slammed down his notebook, swung to his feet, canes firmly in place, marched from the room holding both the respirator and a cigarette, and announced his intention never to return. “Find yourselves a new chairman,” he called out. It was the first spontaneous resignation for him, but not the last, and was met by a deadly silence.