Lord Bell tells BBC: Henderson’s exit as Bell Potts CEO “not enough”

JOHANNESBURG — Lord Bell, the founder of PR firm Bell Pottinger, may stir up mixed emotions from people. While being critical of Bell Pottinger’s business with the Guptas, he was also said to have opened the door for the work that the PR company did for the family. Bell subsequently left Bell Pottinger, but there’s been a bitter ‘war’ between him and the now-former CEO of Bell Potts James Henderson. In this interview, Bell highlights that while Henderson has quit his post as CEO, he still owns a stake in the company. Bell is calling for more severe action and he’s labelled an internal probe (carried out by law firm Herbert Smith) as being as near to a whitewash as one can get. – Gareth van Zyl

Bell Pottinger is one of this country’s most prominent PR firms. It’s founder, Lord Bell, has for many years been closely associated with the Conservative Party and the firm has employed some senior Labour figures, too. Today, the body which regulates the PR industry will meet to decide whether the company should be punished – perhaps expelled – for a campaign in South Africa, which led to the resignation of the company’s Chief Executive yesterday. Manveen Rana has been following this story closely and secured the first interviews with some of the principle players, and she’s with me. Manveen, this is a firm that’s looked after the reputations of some very prominent people and also, some very controversial ones.

Yes, that’s right. When I spoke to Lord Bell a few weeks ago, one of the things he said was that the clients involved in this particular case – the Gupta family – were the first clients he felt he really couldn’t defend, which I think quite a lot of people were quite surprised by because they certainly had a long list of controversial clients in the past. They famously represented General Pinochet when he was being held in Britain, Trafigura, the oil company, when they were involved in the toxic waste dump, Oscar Pistorius, when he was being charged with murder and Asma el-Assad, being President Assad’s wife so they’ve been far from…

They’re used to the headlines.

They’re used to the headlines.

This is the first thing that’s really gotten them into trouble. Just take us through the story.

Well, that’s perhaps one of the most surprising things. This is the first case that’s really caused them huge trouble. They were hired by the Gupta family in South Africa who are a family of industrialists. Within 20 years, they’ve moved to South Africa and managed to make billions. Many people in the country think that this is partly because of the influence they exercise over President Zuma. They hire his son. They’re effectively accused of corruption on such a grand scale that it needs a whole new title. They’re calling it State Capture. They’ve effectively secured government contracts. They’re said to have the power to hire and fire Ministers and they’ve managed to spread their tentacles into every industry imaginable such as mines and media companies, etcetera. They’re all over the state. They hired Bell Pottinger to come in and do reputation management and a bit of corporate work but also, to launch a campaign on what they were calling ‘economic emancipation’.

This is basically, encouraging black people to seize economic power, which in its own right sounds perfectly respectable, but basically, the way the campaign worked was to distract attention from encouraging ordinary South Africans to blame their economic growth not on President Zuma or the government’s economic policies, but to blame white businesses that have functioned in the country for an awfully long time. They called it ‘white monopoly capital’ and what we saw eventually, was the protests on the streets, which was calling for Zimbabwe-style land-grabs. There was violence against white people. There were people campaigning outside the houses of white industrialists. I spoke to Nicholas Wolpe out in South Africa, who runs a memorial to the anti-Apartheid movement and he accused Bell Pottinger of effectively undoing the work of Nelson Mandela and exploiting racial tensions in South Africa.

The ANC, in every single historical document you read, says that South Africa will not fulfil its full potential unless it creates a non-racial society where all South Africans participate and Bell Pottinger has come in, and stuck a knife into the heart of that very ethos and fabric by exploiting something that is extremely sensitive, and they’ve been malicious.

Now, this became a huge scandal out in South Africa. The Democratic Alliance (the opposition party) has been very good at raising awareness of what was going on and Bell Pottinger started to lose South African clients and it found itself in the headlines every day. There were protests on the street with people carrying placards and faces of staff of Bell Pottinger at one point. Eventually, earlier this summer, the company sacked the employee who was in charge of the account and suspended three others, and they also launched an internal investigation by the company (the law firm, Herbert Smith). James Henderson, the CEO, issued what he called an unequivocal apology and he also resigned this weekend. When I spoke to him a few weeks ago, he said his company’s actions had really been misunderstood.

“At worst, we were very naïve in what we got involved with, but there was no – at any point – intention to create the impact that has been claimed that we created. We went out, predominantly with a corporate campaign, trying to handle an issue in a responsible way and I believe that will come out. However, I believe there was naiveté and we were involved in a very political situation and we’ve allowed ourselves to become a story but the actions we’ve been accused of (in time) I hope, will come out that we did not do that. We have been called guilty before any real evidence has been shown of what we did do. We clearly take huge concern of this, which is why we commissioned a Herbert Smith report to look into every aspect, every email, and every document that was produced. The proposals I saw on this issue, looked like corporate responsible proposals. They did not fuel racial tension or have any intention of doing so.”

Well he, as you say, has just resigned (or resigned over the weekend). Where’s the story now?

Well, we’ve now seen the results of the internal investigation by Herbert Smith, which when I was doing the interviews, I was assured by James Henderson and various people from Bell Pottinger would prove that they were not guilty of many of the accusations. One of the big accusations out in South Africa was that perhaps the company had been involved in creating Twitter bots, which had led to a huge explosion in the term of ‘white monopoly capital’. The report does say that it hasn’t seen evidence of that but it does say that of the work that they were doing, they thought that some of it was inappropriate. It was negative. It targeted wealthy, white South Africans and was potentially racially divisive so they have been found guilty, effectively, of the racial tensions.

The report also points out that they can’t be certain that senior management knew about the detail of the work that was being done but they should have been aware of the sensitivity of this account and therefore, should have made more effort to be monitoring the work of those lower down, which is one of the things that we talked about at length. This morning, I’d spoken to Lord Bell who was one of the founders of the firm, who left over the problems in this account and he says that James Henderson’s resignation isn’t quite enough.

“The resignation doesn’t solve anything. It simply adds to the confusion. He owns a large percentage of the company. He’s no longer the Chief Executive. That’s a particular job but it doesn’t resolve anything. It doesn’t solve anything. It doesn’t make anything go away and it leaves a smell in the air.”

Is it possible to detoxify the brand as long as James Henderson is still so closely associated with it?

“I think it’s virtually impossible to detoxify the brand as long as James is allowed to be a shareholder. The other major shareholders have to look to their own relationship as well. I fail to see how its future looks in any way, positive.”

Do you think the company can survive?

“I think it’s possible for it to survive. I think it’s unlikely, but it’s possible.”

So, the Herbert Smith report has been published today. It does highlight that there wasn’t enough oversight from senior management. You were there for part of the time you held this account. Is that a criticism you recognise?

“It’s partially true. It’s not completely true. It’s not a complete picture… It’s not a whitewash as such, but it’s as near to a whitewash as you can get.”

That’s Lord Bell. Now, we should point out that James Henderson did deny that he knew the detail of the account at the time and the report does say that they haven’t seen evidence of that, but there should have been processes in place. The question of whether the firm can survive is very interesting. As Lord Bell points out, James Henderson is still a very major shareholder. He and his fiancé own just under 40% of the company. That will be a problem with clients. When I spoke to him, James Henderson said that they’d already lost a substantial number of clients. I’ve been told that they’ve lost even more since that interview was done. They also seem to be haemorrhaging senior staff. James Henderson isn’t the only resignation in recent weeks at the company. The PRCA, as we said (this is the trade body in charge of the PR industry) has had a hearing.

I’ve been told they’ve decided to expel Bell Pottinger, having found them guilty of having broken the ethics code of the committee. It was supposed to be announced today. Bell Pottinger has appealed but the final decision will be announced tomorrow.

Well, Manveen, thank you very much indeed. Phumzile Van Damme is from the Democratic Alliance – South Africa’s opposition party. Thanks so much for coming in to talk to us. How much damage do you think this campaign did in South Africa? Phumzile, can you hear me? We seem to have lost that. I’m sorry. We’ve lost Phumzile van Damme from the Democratic Alliance but we can have a talk to the former Labour cabinet Minister, Lord Hain. Peter Hain grew up in South Africa and was a prominent anti-Apartheid campaigner. You are with us, aren’t you? Good afternoon.

I definitely am, Ed. I’m happy to talk to you. Can I commend the program for the way you’ve drawn attention to this scandal?

That’s a great compliment. Thank you very much for that. Let me put the same question to you. How much damage do you think it did in South Africa?

A lot of damage. It was a pernicious campaign, using fake Twitter accounts spreading fake news.