Onward, Free Market Soldiers: Privatizing Public Diplomacy

Submitted by Diane Farsetta on Wed, 04/18/2007 - 09:48.

Long-time Bush confidante and U.S. public diplomacy chief Karen Hughes

U.S. Under Secretary of State Karen Hughes' remarks at the "Private Sector Summit on Public Diplomacy" opened on a militaristic note. "Looking around the room and seeing the quality and the scope of the talent represented here," she said, "I feel like reinforcements have arrived."

Given Hughes' membership in the White House Iraq Group, a key part of the Bush administration's Iraq War "sell job," perhaps her choice of imagery isn't surprising. But are her new corporate "troops" well suited for the job of public diplomacy?

The January 2007 public diplomacy summit was co-sponsored by the State Department and the PR Coalition, an "ad hoc partnership" of groups representing the public relations, investor relations, lobbying and other communications professions. Nearly 160 PR executives and government officials attended, engaging "in a dialogue over how the private sector can become more involved in and supportive of U.S. public diplomacy," in the words of PR Coalition chair and Accenture PR chief James Murphy.

The PR Coalition's recently released summit report (PDF file) contains the usual warnings about the United States' "image problem" overseas, while fretting that "anti-Americanism is bad for business." Not surprisingly, it skirts around the root causes. The opening page tersely notes that summit participants "were there to address the image problems, not create foreign policy." (While this admission is routine in public diplomacy circles, PR pros often say the opposite, insisting that their clients' new-found concern for human rights, the environment or other noble cause reflects a real change in policies and practices.)

More oblique references to fallout from the Bush administration's "war on terror" follow. "It's no secret that negative views of this country are most widespread in Muslim countries," states a summary of remarks by the State Department's Steve Shaffer, "but they also exist in sub-Saharan Africa" and "even among some long-term allies," with "much of the decline coming after 9/11." The Program on International Policy Attitudes' Steven Kull is paraphrased as saying, "There is also a fear in many countries that the U.S. will use force against them."

Wow. Even with all the high-powered PR flacks in the room -- including Burson-Marsteller founder Harold Burson and CEO Mark Penn, Edelman general manager Niel Flieger, EnviroComm chair E. Bruce Harrison, Fleishman-Hillard senior vice-president Jeff Weintraub, GolinHarris chair Al Golin, Ketchum CEO Raymond Kotcher, Ogilvy Public Relations Worldwide CEO Paul Hicks, and Publicis chair Lou Capozzi -- it's difficult to imagine a lipstick garish enough to distract from that pig.

Secretary of State Rice addresses summit participants

Summit participants developed eleven "Models for Action that the private sector can use to support U.S. public diplomacy." Several are to increase international exchanges, a tried and true way to increase the global awareness of frequently-insular U.S. citizens, in addition to providing first-hand U.S. experiences for foreign visitors.

However, some suggestions are vague to the point of meaninglessness. For example: "Make U.S. business practices consistent with U.S. values." Would that mean providing living wages to workers employed overseas as contractors to U.S.-based companies? Somehow I think that Wal-Mart lobbyists Robert Lee Culpepper and Sarah Thorn, who were at the summit, might object to that. (Executives from Citibank, Pfizer, Wyeth, General Electric, the Washington Post, Newsweek and Reuters were also present.)

Other suggestions boil down to co-opting civil society groups (referred to as NGOs, for non-governmental organizations). These include "strategic philanthropy and greater engagement with responsible NGOs" (emphasis added), closely followed by the clarification, "Companies should partner with NGOs that 'fit' their business model." A similar suggestion is to "create 'circles of influence' through relationships with organizations, chambers of commerce, journalists and local business leaders."

Perhaps the most striking assumption is that promoting capitalism will somehow excuse, or lessen antagonism towards, U.S. foreign policy. Elizabeth Funk of the microcredit organization Unitus told summit attendees, "There is no better way to improve America's image abroad than to allow the people in those countries to bring themselves out of poverty, and experience the free enterprise system for themselves." David Chernow of JA (Junior Achievement) Worldwide explained, "Our model is driven largely by U.S.-based multinational companies. ... We are teaching young people about free market principles and how they can create opportunities for everyone."

Of course, summit attendees hail from major U.S. corporations. It's not surprising that they see the free market system as a core American value. However, public diplomacy efforts emphasizing the wonders of capitalism are unlikely to play well in Palestine, Persia, Pakistan, or any other region where much of the population condemns the U.S. initiated conflicts in Iraq and Afghanistan, and U.S. policy towards Israel and Palestine.

Members of the PR Coalition are skilled at portraying image-challenged clients -- like pharmaceutical companies, oil companies and the nuclear industry -- as responsible, commendable contributors to U.S. society. But applying the same PR tactics to issues of war, national sovereignty and global economic development risks increasing international resentment of the United States.

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Diane Farsetta is the Center for Media and Democracy's senior researcher.

Many of the links in the above article are to articles on SourceWatch, the Center for Media and Democracy's collaborative online encyclopedia. SourceWatch volunteer editors can help update, expand and improve these or any of the other SourceWatch profiles of people, issues and groups shaping the public agenda. It's free to sign up, and we'd love to have you join us.

Diane Farsetta's blog

Topics: corporations | international | public diplomacy | public relations | U.S. government | war/peace

Negotiators Say Sallie Mae to Be Sold for $25 Billion

April 16, 2007

Sallie Mae agreed late last night to be sold to JP Morgan Chase, Bank of America and two private equity firms for $25 billion, said people involved in the negotiations.

The deal would move the nation’s largest education lender, officially known as the SLM Corporation, into private control amid increasing turmoil for the company. The deal is expected to be announced today, these people said.

The other two private buyers are New York-based firms which have until now have kept a relatively low profile: J.C. Flowers & Company and Friedman Fleischer & Lowe. Together, the two firms will control 50.2 percent of the company, while the banks will own the rest.

By ANDREW ROSS SORKIN and JENNIFER 8. LEE

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Contractor linked to Bush admin. won $120 million deal to maintain Walter Reed

Privatized Walter Reed Workforce Gets Scrutiny
Army Facility Lost Dozens Of Maintenance Workers

By Steve Vogel and Renae Merle
Washington Post Staff Writers
Saturday, March 10, 2007; A03

The scandal over treatment of outpatients at Walter Reed Army Medical Center has focused attention on the Army's decision to privatize the facilities support workforce at the hospital, a move commanders say left the building maintenance staff undermanned.

Some Democratic lawmakers have questioned the decision to hire IAP Worldwide Services, a contractor with connections to the Bush administration and to KBR, a Halliburton subsidiary.

Last year, IAP won a $120 million contract to maintain and operate Walter Reed facilities. The decision reversed a 2004 finding by the Army that it would be more cost-effective to keep the work in-house. After IAP protested, Army auditors ruled that the cost estimates offered by in-house federal workers were too low. They had to submit a new bid, which added 23 employees and $16 million to their cost, according to the Army.

Yesterday, the American Federation of Government Employees, the largest federal workers union, blamed pressure on the Army from the White House's Office of Management and Budget for the decision to privatize its civilian workforce.

"Left to its own devices, the Army would likely have suspended this privatization effort," John Gage, president of the organization, said in a statement. "However, the political pressure from OMB left Army officials with no choice but to go forward, even if that resulted in unsatisfactory care to the nation's veterans."

The Army selected IAP for the five-year deal in January 2006, but IAP did not take over management until last month. During that period, the number of facilities management workers at Walter Reed dropped from about 180 to 100, and the hospital found it hard to hire replacements.

Maj. Gen. George W. Weightman, who was Walter Reed's commander until he was relieved last week, testified this week that the privatization -- in combination with a decision by the Pentagon in 2005 to close Walter Reed by 2011 -- "absolutely" contributed to the problems.

IAP said in a statement it has "responded with a sense of urgency to address maintenance concerns throughout the [Walter Reed] complex."

Sen. Barbara A. Mikulski (D-Md.) charged this week that the Bush administration had unfairly blamed federal workers for problems "that are a direct result of the Bush administration's contracting out policy."

The White House did not respond to a request for comment.

IAP, based in Cape Canaveral, has provided such services to the government as delivering ice in the Gulf Coast after Hurricane Katrina and helping maintain Afghanistan's air traffic control system. In 2006, the firm had $393 million in military contracts, according to Pentagon data.

IAP is owned by Cerberus Capital Management LP, an asset-management firm chaired by former Treasury secretary John W. Snow. The company is headed by two former high-ranking executives of KBR, formerly known as Kellogg Brown & Root. Al Neffgen, IAP's chief executive, was chief operating officer for a KBR division before joining IAP in 2004. IAP's president, Dave Swindle, is a former KBR vice president.

The company has worked at Walter Reed since 2003, providing housekeepers, computer analysts and clerks under a Treasury contract.

In an unrelated case, the U.S. attorney's office in Maryland announced that a Rockville contractor, Leon Krachyna Jr., pleaded guilty yesterday to a charge of bribing a Walter Reed official.

The official, Kevin R. Roach, was indicted in October for conspiracy and obstruction. According to court papers, Roach, a civilian contract specialist for the Army Medical Command, received kickbacks between 1999 and 2003 in exchange for favorable treatment of companies controlled by Krachyna and his partner, Louis Pisani Jr. Roach and Pisani await trial.

At a Fort Myer ceremony yesterday, the Army bade farewell to Secretary Francis J. Harvey, forced to resign over Walter Reed. Leaders, he said, must show "that they will be held personally accountable for their decisions."

Valor and Squalor: PAUL KRUGMAN - Walter Reed

THE COMPLETE ARTICLE
THE NEW YORK TIMES
OP-ED COLUMNIST

Valor and Squalor

By PAUL KRUGMAN

Published: March 5, 2007

The horrors of Walter Reed Army Medical Center’s outpatient unit are no aberration.

When Salon, the online magazine, reported on mistreatment of veterans at the Walter Reed Army Medical Center two years ago, officials simply denied that there were any problems. And they initially tried to brush off last month’s exposé in The Washington Post.

But this time, with President Bush’s approval at 29 percent, Democrats in control of Congress, and Donald Rumsfeld no longer defense secretary — Robert Gates, his successor, appears genuinely distressed at the situation — the whitewash didn’t stick.

Yet even now it’s not clear whether the public will be told the full story, which is that the horrors of Walter Reed’s outpatient unit are no aberration. For all its cries of “support the troops,” the Bush administration has treated veterans’ medical care the same way it treats everything else: nickel-and-diming the needy, protecting the incompetent and privatizing everything it can.

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The redoubtable Henry Waxman, chairman of the House Committee on Oversight and Government Reform, points out that IAP Worldwide Services, a company run by two former Halliburton executives, received a large contract to run Walter Reed under suspicious circumstances: the Army reversed the results of an audit concluding that government employees could do the job more cheaply.

And Mr. Waxman, who will be holding a hearing on the issue today, appears to have solid evidence, including an internal Walter Reed memo from last year, that the prospect of privatization led to a FEMA-type exodus of skilled personnel.

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