Weekly Wire
The Boston Phoenix Diplomacy For Hire

Public-relations and lobbying firms are a hidden piece of the Balkan puzzle

By Ben Geman

JUNE 1, 1999:  Bob Dole pulled no punches in Sunday's Boston Globe. Slobodan Milosevic, he wrote in an op-ed piece blasting the Serbian thug/head of state, should be indicted as a war criminal for his brutality in the Balkans.

The tag line at the end of the piece identified Dole as a former Senate majority leader and past presidential candidate. What it didn't say, however, is that Dole works for the powerful Washington lobbying and law firm Verner, Liipfert, Bernhard, McPherson, and Hand. The company represents -- in addition to numerous corporate clients -- the government of Slovenia, a former Yugoslavian republic and NATO ally.

Dole isn't involved with the Slovenia account, and his Globe column was consistent with his previously expressed views on the Balkans. So maybe it's unfair to link him to a paid lobbying effort aimed at influencing US and world opinion. But it could also be argued that that's why firms such as Verner Liipfert hire the Bob Doles of the world -- whether they work on the account or not, they have clout. And clout, in the end, is what counts.

Verner Liipfert exemplifies an aspect of international relations that's nearly invisible to the public eye -- and that's key to understanding how policy is shaped, especially in the latest Balkan crisis. Although diplomacy is most often portrayed as the business of consulates and embassies and heads of state, large American public-relations, law, and lobbying firms have quietly become important players, working directly for foreign governments -- often for big money. In effect, they have become diplomats for hire.

With thousands of employees at their disposal (former journalists and politicians often among them), these firms know how to get the ear of editorial boards and congressional staffers alike. Ruder Finn was the first firm to venture into the Balkans, representing the governments of Bosnia and Croatia in the early 1990s and Kosovo between 1992 and 1997. Now, several other firms also do public-relations work for countries in the region. The giant firm BSMG Worldwide, which represents the Boston Red Sox (see "Inside Game," right ), claims the Bulgarian government as a client. The Washington International Group, according to the Department of Justice, began representing Bosnia and Herzegovina in January and worked for Kosovo at the Rambouillet peace talks earlier this year.

The Balkans, however, are not the only place where governments have figured out that the best path to US officials and op-ed pages is through the spin cycle. Countries on every continent use American PR firms to attract investment or to burnish their image among Washington elites, and the practice is decades old; in the late 1930s, Congress passed the Foreign Agents Registration Act in response to the use of American PR agents by the Germans. According to the Department of Justice, dozens of countries employ American PR or lobbying forms that have registered with the government under that act. And there has been "an explosion" since the end of the Cold War, says Kevin McCauley, editor of O'Dwyer's Washington Report, which covers the PR and lobbying industry. PR firms, he says, act as "hand-holders" for governments that formerly had little occasion to deal with the US. "If you look at countries that did not have to have representation in Washington [during the Cold War], they were under the thumb of the Soviet Union -- central Europe, Eastern Europe, the former republics of the Soviet Union," he says. "All have to make themselves known in Washington."

Adds Jim Harff, who worked with governments of Bosnia and Croatia while at the Washington, DC-based Ruder Finn and is now the CEO of the PR firm Global Communicators: "As the communist countries began to privatize and develop market economies, they fully realized that private investment was critical to their success and to lifting their economies out of the doldrums of the socialist state and into a capitalist market economy. A number of them looked to us, public-affairs firms, to help establish relationships with investors and corporations."

To hear PR-firm heads tell it, this diplomacy for hire is utterly benign -- American companies offer a service, pushing the needs of small and often poor countries into the public eye. "Public-relations people are simply intermediaries," says Ruder Finn chair David Finn. "We get people in positions of responsibility together and facilitate their communications." Harff, who headed Ruder Finn's Global Public Affairs division before leaving in 1997, credits American firms with educating policymakers and the media ealier in the decade about the Balkans in general and Kosovo in particular. "People had no idea where Kosovo was, what the issues were, who the personalities were, or what US policy interests were in the region," he says. "Our challenge was to bring them into contact with people who needed to have an understanding and a desire to understand.

"Part of decision-making is having information from a diversity of sources," he adds. "I have always felt that was the biggest contribution we could make."

To their detractors, though, these PR firms aren't "educating" and "facilitating" so much as they are manipulating US opinion. These critics charge that American firms use their talent and influence to spin complex issues, portraying them in black-and-white terms that distort the real story. Just before the Persian Gulf War, for example, the Kuwaiti government retained the public-relations firm Hill and Knowlton, which helped arrange the later-discredited congressional testimony of a young Kuwaiti woman -- eventually revealed to be the daughter of a Kuwaiti ambassador -- who told of invading Iraqi soldiers' pulling premature Kuwaiti babies from their incubators.

Even if PR firms do not orchestrate false or misleading testimony, their access to insiders and their skill at drumming up favorable coverage adds unnecessary and unfortunate layers to policymaking, says Steve Rendall, senior analyst with Fairness and Accuracy in Reporting, a media-watchdog group. Without the PR firms, he says, "we would all have a clearer view of what was happening in the world." Although Rendall is no apologist for the murderous Milosevic, he believes that PR firms that have worked for Balkan-area clients such as Bosnia and Croatia have encouraged the public to perceive too stark a contrast between Milosevic and other Balkan leaders. "None of this is to say that Milosevic and the Serbs are just victims of bad press," he says. "But there has been a concerted effort in the press, with the help of PR firms, to paint the Serbs as the only thugs in the neighborhood."

Adds John Stauber, co-author of the 1995 book Toxic Sludge Is Good for You: Lies, Damn Lies, and the Public Relations Industry (Common Courage Press): "I think [the PR activity] is very unhealthy for democracy. It's very important that domestic policy debates be open and [that] we know whose interests are at stake. . . . Democracy requires, in the current vernacular, a lot of transparency." But PR, he says, "works best when it's invisible."

As if that's not reason enough for skepticism, consider this: foreign-government officials aren't the only ones who understand how useful PR professionals can be. Two weeks ago, Leslie Dach, vice-chair of public-relations giant Edelman Worldwide, was hired to work on Kosovo-related communications. For the White House.



Inside game

What do Serbia's neighbor Bulgaria, a controversial Indonesian business tycoon, and the Boston Red Sox have in common? All three are -- or have been -- represented by Washington, DC-based public-relations firm BSMG Worldwide.

The Boston branch of BSMG -- where Micho Spring, a former deputy mayor of Boston, is president and a partner -- was hired by the Red Sox this year to help pitch the team's plans for a new Fenway Park. The PR giant is also one of several firms whose clientele includes foreign governments with a stake in the Balkan wars, as well as other governments and business interests worldwide.

According to the US Department of Justice, BSMG was paid more than $1.5 million between 1995 and 1998 by Indonesian public-relations firm Mercurindo, an instrument of businessman Bob Hasan, a friend and associate of former Indonesian president Suharto.

Under Suharto, whose notoriously corrupt economy was controlled by his family and close friends, Hasan prospered in industries ranging from timber to automobiles. "He was the leading timber tycoon in Indonesia and one of the two main crony business associates of Suharto," says Robert Weissman, editor of Multinational Monitor magazine. "He was his big golfing buddy."

According to BSMG officials, the company helped Mercurindo reach out to American corporations, encouraging them to invest in Indonesia and spread the word about "sustainable development" there. "A lot of companies were looking in Indonesia for business opportunities," says BSMG principal Jim Meszaros. "We put out a lot of information about the country, a lot of economic information; we were doing a communications campaign, getting out a message to a broad audience about the economic conditions in Indonesia."

To human-rights activists and environmentalists, though, Suharto and Hasan are bad guys. Before Suharto was pressured from office after the country's economic collapse last year, his regime presided over the murderous occupation of the former Portuguese colony East Timor. Indonesian timber companies, meanwhile, are blamed for widespread deforestation in that country.

"He [Hasan] has been involved with terribly destructive logging operations and destructive plantations," says Stephanie Fried, a senior scientist with the Environmental Defense Fund. Fried should know -- she spent two years doing research in Borneo, witnessing the effects of Hasan's logging firsthand.


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