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By John Anderson
There have long been unconfirmed reports that when God admonished Adam for taking a bite out of the apple in the Garden of Eden, Adam’s initial response was to hire a PR firm with an established practice in investment banking.
The PR firm gave Adam three options: deny being in the Garden in the first place, blame it on Eve, or tell God you thought it was a pear.
Adam went for option three and thus was born the first attempt at slipping out of the cold noose of the truth.
Politicians and other assorted luminaries have helped to perfect this skill over the years. My favourite new version is: “We don’t recognize that narrative,” from PR advisers to the now infamous Kids Company. Less recently, but perhaps most famously of all was Bill Clinton’s: “It depends on what the meaning of the word ‘is’ is,” during his testimony in the Monica Lewinsky case.
Dig deep into the archives of investment banking and you will find a panoply of slippery attempts at obfuscation, half-truths and legerdemain-like tactics, all aimed at avoiding acknowledging that something might be amiss.
Zero-sum game
What makes that amazing to my mind is that the markets are by their very nature a zero-sum game in which all the competitors have a fairly clear view into each other’s tents and absolutely no hesitancy in spilling the beans when they see a competitor in trouble. One would think that would make it difficult to fudge things; instead it has turned the ability to sidestep into an art form.
Earlier in my career I worked for a bank around which rumours were circling of insider-trading activity in the Latin American debt market. An esteemed newspaper had gotten wind of the story and was pursuing it from the angle that the bank had launched an internal investigation into the issue.
Obviously, if the newspaper could stand that element up, everything else about its piece would look more credible. I spent a rather gritty half hour trying to take the steam out of the story in general and more precisely to dissuade the journalist from writing that we had launched an investigation. I hung my hopes on the distinction between a formal investigation and a regular review of trading activity.
It worked. The story never ran. On a personal note, however, my girlfriend at the time was eating her cornflakes across the table from me during the call. When I hung up, she asked: “Did you just lie to the Financial Times?”
I replied: “I wouldn’t call it lying.”
“Well I wouldn’t call it telling the truth,” she shot back. We broke up shortly afterwards.
On other occasions there were times when I found myself filling in for the PR man who represented the late Jimmy Lee’s team at the old Chase Manhattan.
When that happened, I would dutifully trudge down to the loan syndication desk with a call list of all the various trade journalists who covered that market. We would then “dial for dollars” to the reporters to give them background briefings on all our stellar deals in the market and all the mis-priced, mis-sold deals the competitors were flogging that week.
Now any loan syndication effort, no matter how good, always has some deals sloshing around in the bottom of the tank that aren’t going to win any year-end awards or might not even get done at all.
Song and dance
But just like Lake Wobegone, where all the children are above average, there was no such thing in Jimmy’s world as a dog deal. So every Thursday, a charade was played out when a reporter would ask about the woofers and the desk head would come up with a song-and-dance routine about how the book was taking a little bit longer than normal, but not to worry, it would get done.
Since no one wanted to offend such an important, insightful source within the market, the obfuscation worked in the same way that a glacier can grind down granite. I suppose it’s easier to hide the truth when you’re also a source of it.
Citizen journalism, which enables anyone to post up instant pictures and commentary about current events, might not seem to be much of a problem for the wholesale side of finance, but there was one incident I helped the PR for that, had it happened today, could have turned out very different.
About 15 years ago, a very senior executive of the bank where I was working got stinking drunk at the end of a week-long team-building event. When it was time for him to make his closing remarks, he came up to the dais and took off his clothes to reveal he was wearing the top and bottom of a woman’s bikini and starting hurling insults at many of those in the room.
The executive was eventually subdued and only one publication – ironically, this one – got wind of the episode. We managed to talk Euromoney down by explaining that he was actually wearing a pair of Speedos.
Sorry, but we lied. Had that happened today, the smartphone pictures from the bankers and the banquet staff would have made their way onto the internet as fast as those little electrons can travel.