Top 10 List of Reputations in Crisis for 2008

NEW YORK – The following is Mike “The Reputation Doctor” Paul’s Annual Top 10 List of Reputations in Crisis for 2008. This list is compiled by and solely the opinion of global reputation management expert Mike Paul. You’ve seen him weekly as a guest TV news commentator analyzing top individual and organizational reputations in crisis.

1. THE GLOBAL FINANCIAL CRISIS

The rising defaults on subprime mortgages in the US triggered a crisis for money markets worldwide. Many of the world’s leading investment banks have collapsed as a result and the U.S. government has proposed a massive bail-out. The crisis has become one of the most radical reshapings of the global banking sector, as governments and the private sector battle to shore up the financial system following the disappearance of financial corporations like Bear Stearns and Lehman Brothers and Merrill Lynch and Wachovia as independent entities and the $85bn government rescue of insurance giant, AIG. Nine large banks, including Bank of America Corp., Wells Fargo & Co., Citigroup Inc. and JPMorgan Chase & Co., received $125 billion government bailouts. Fannie Mae and Freddie Mac were placed under government control for their debt-filled contribution to the worst mortgage crisis in history. The global financial crisis really started to show its tortured face in the middle of 2007 and hit the world hard in 2008. Around the globe stock markets have fallen and continue in crisis, national and worldwide financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with bail-out packages to save their financial systems.

Many people are concerned those responsible for the financial problems are the very ones being bailed out. By early fall 2008, the whole mess triggered a global collapse of financial confidence, as well as wrecking the money and commercial paper markets. The moves also led to massive hedge fund redemptions, which forced them to liquidate stocks. And the crisis rolls on. Over 533,000 people lost their jobs in the U.S. during the month of November 2008 alone. The global financial meltdown affects the livelihoods of almost all of us in an increasingly inter-connected world. Families are defaulting on their mortgages and losing their homes, people are living on credit cards and will soon be in even bigger financial debt or bankruptcy in early 2009 and homeless populations and beggars are increasing on the street of cities worldwide. What will we learn from this mess? We have many more months before the economy hits rock bottom. Hold on to your hat because the ride down is not over – yet.

2. PRESIDENT GEORGE W. BUSH

As the Bush administration enters its last weeks, the Pew Research Center for the People and the Press asked Americans how he’s done and their responses are “overwhelmingly negative.” Over the years, Pew’s polls have tracked the president’s decreasing popularity since the days after 9/11. His approval rating now stands at a mire 24 percent. Eleven percent of respondents think Bush will be remembered as an “outstanding” or “above average” president, “by far the lowest positive end-of-term rating for any of the past four presidents.” The Pew researchers conclude that Bush’s legacy has been damaged by “his administration’s mixed record of competent governance” in responding to challenges like the Iraq war and Hurricane Katrina. While a majority of respondents still give Bush credit on some issues, such as preventing another terrorist attack from occurring in America, overall “the U.S. government ‘brand’ deteriorated badly during the Bush years” both domestically and overseas. Bush’s current popularity is the lowest of any president, as well as the lowest sustained approval numbers on record. Ouch! That’s a reputation in crisis!

3. THE BIG 3 AUTO MAKERS

The CEOs of GM, Ford and Chrysler all flew on their individual corporate jets to Washington, D.C. for Congressional hearings begging for taxpayer money to bail the U.S. auto industry out of financial ruin. Congress rejected the bail out, but President Bush recently gave Detroit the bail out to avoid having more crises as part of his presidential legacy. Congressman Gary Ackerman’s quote on the corporate jet PR snafu is priceless: “There’s a delicious irony of seeing private luxury jets flying into DC, and people coming off of them with tin cups in their hands, saying that they are going to be trimming down and streamlining their businesses. It’s almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. Kind of makes you a little bit suspicious as to whether or not we’ve seen the future. There’s a message there. Couldn’t you all have downgraded to first class or jet-pooled to get here? It would have at least sent the message that you do get it.” Hello! They own car companies and they should be driving every where humanly possible as part of their branding message! It takes a special kind of incompetence to completely deplete the goodwill of a car-crazy nation like the U.S. Yet polls show that most Americans didn’t want to bail out the automakers. As with the global financial crisis, there is plenty of blame to go around, from poorly designed cars to fat union benefits and complicated work rules. Sadly, it seems thousands of workers might be destined for the unemployment line.

4. SARAH PALIN

Many say she became famous this year. Not so! Sarah Palin became infamous in 2008 and there is a big difference between becoming famous and infamous! Her popularity was second only to her huge fall from grace. Once she opened her mouth to discuss the important issues facing our great nation, she became the laughing stock of the U.S. and it was viewed by the entire world. She was not ready for prime time, unless you include the skits about her and with her on NBC’s Saturday Night Live. The question is were we laughing with her or against her? Sarah Palin can thank Tina Fey for all her haters out there. At least that’s what a poll by the Washington Times suggests. The paper reports that “Tina Fey effect” has turned supporters off the Alaskan governor and her former running mate, presidential candidate John McCain. Political scientist Jerald Podair tells the New York Post: “Presidential impersonators do influence elections, and in this one, Tina Fey, ruined Sarah Palin’s political career. In a political culture that takes its cues from popular culture, a good impersonator may be worth a million votes. The parodies did damage. People remember Gerald Ford through the prism of Chevy Chase. Ford was among our most athletic presidents, and he had a wide-ranging knowledge of public-policy issues. But because of SNL, many came to think of him as a buffoon.” Many also blamed the judgment of Senator John McCain for his pick of a polarizing narcissist to be his vice presidential running mate. The feeling was that Gov. Sarah Palin’s divisively conservative rhetoric, lack of understanding of the issues and exhibitionistic style alienated mainstream voters. The logic followed that this ultimately undercut Mr. McCain’s reputation as a thoughtful and independent agent for change lost him the presidency. I tend to support both analyses.

5. BERNARD MADOFF

Wall Street today may be a vast global community with multinational reach. But it’s also a small, insulated world based on trust, where your word and a handshake are your bond. Or not! Bernard Madoff, the 70-year-old money manager and former NASDAQ chairman, was arrested by the FBI for allegedly running the largest Ponzi scheme in financial history, losing an estimated $50 billion in client money. Investigators say Madoff told them that his business was just “one big lie.” Of course this is terrible news for numerous wealthy individuals, banks, and charitable foundations who are now left with no money after many gave him millions, and some billions, each to manage. As far back as 1999, the Securities and Exchange Commission was receiving credible complaints that the investment arm of Bernard L. Madoff Investment Securities actually was an enormous fraud. In May 2001, the respected financial magazine Barron’s ran a story openly questioning Madoff’s trading techniques and raising potential ethical issues with the secretive way he operated. But Madoff simply called the allegations “ridiculous,” and everyone believed him. Regulators ignored the evidence and failed to pick up the scent. The rest of the media just dismissed the accusations. And investors kept pouring money into his funds. This was a huge mistake. As we now know, Barron’s and the SEC’s tipsters were on to something. There was something fishy with Madoff’s business. In essence, he wasn’t earning those great returns at all. Instead, it appears that he was simply paying off old investors with money he was bringing in from new investors. Madoff also made heavy contributions to many top politicians in Washington and even had family members and friends working in various government offices. The Madoff empire was a classic Ponzi scheme, and as soon as the economy tightened up and new money stopped flowing in, the whole thing unraveled. Where was the accountability? Where was the SEC? These questions will bring chapter 2 to this saga soon. It is not over.

6. RICHARD FULD – As reported in New York Magazine, on September 15, Lehman filed for bankruptcy, the largest in history and a devastating blow to an already fragile financial system. Fuld became a symbol of failure, the face of arrogant, blindered, massively overleveraged Wall Street. Fuld is blamed for betting the farm on the way up, then stubbornly refusing to recognize the company’s dire straits on the way down. Under Fuld, Lehman became the single biggest Wall Street underwriter of mortgage debt right into the collapse of the mortgage debt crisis. A few weeks after the bankruptcy, Congress summoned him to Washington for a deeply humiliating inquisition. “You’re the villain today,” one congressman told him. For Congress, he was little better than a looter, pocketing millions as his company collapsed -$480 million over half a dozen years, another congressman charged. If that wasn’t enough pain, three sets of prosecutors launched investigations of Fuld and Lehman, probing whether shareholders had been duped. But in the end, there was no lifeline from the U.S. government. Not only did CEO Fuld watch Lehman Brothers, the 158-year-old investment bank, fall part, but he reportedly got punched in the face in the company gym and was viciously mocked on NBC’s Saturday Night Live. According to CNBC, Fuld was allegedly knocked out with a single punch in the investment bank’s gym, by an angry employee who came over to Fuld on the treadmill and walloped him with the knockout punch! Some say the blow from the government was worse than the punch to Fuld’s face. I beg to differ. The punch in the face alone would have put Fuld on my reputations in crisis list!

7. CHINA’S BUSINESS COMMUNITY

Made in China. Those three words are becoming a marketers worst nightmare. As reported in Business Week, after a year of massive toy recalls, tainted toothpaste scares, and poisonous pet food incidents, consumers around the globe are thinking twice-or more-before buying Chinese-made goods. Indeed, in a new survey of marketing and business professionals worldwide, 69% of respondents said the phrase “Made in China” hurts mainland brands. The word most frequently associated with Chinese products? “Cheap.” “Conservatively, it will be five years before people will let go of their fear of made in China,” says Jonathan Chajet, Asia-Pacific Strategy Director at consultancy Interbrand Corp., which carried out the survey for BusinessWeek. That creates some big challenges for China’s exporters, even those far removed from the current problem sectors of toys and food production. In its poll of 569 respondents outside China, the survey found that this year’s recalls have dealt a serious setback to mainland brands. Although the respondents said Chinese products are “a good value,” few labeled them “safe,” “high quality,” “prestigious,” or “luxurious.” Let’s not forget, either, the havoc China’s development has wreaked within the country itself. Waste disposal and pollution will grow into bigger and bigger problems, as the landscape sprouts more factories and industrial complexes. Some Beijing officials, as well as those at local levels, the country has 41,636 townships, have a stronger interest in winning business than they do in preserving the environment. A significant number are undoubtedly in bed with the factories seeking building permits and other privileges. Yes, the Chinese government is good about assuring its foreign trading partners of its ecologically sound policies, but enforcement ranges from tricky to impossible. Communist officials in localities have great power. A mayor who likes the idea of a new tool-and-die factory can make it happen with relatively few checks and balances. Just as important, human rights violations in China remain systematic and widespread. The Chinese government continues to suppress dissenting opinions and maintains political control over the legal system, resulting in an arbitrary and sometimes abusive judicial regime. The lack of accountability of the government and the Chinese Communist Party means that abuses by officials often go unchecked. Especially China’s policies and track record with capital punishment, the one-child policy, abuse of women and the policy of Han Chinese cultural integration towards Tibet.

8. ELIOT SPITZER

Spitzer, the former New York governor and former New York attorney general, who was once called “the Sheriff of Wall Street” for his crusade against investment fraud, had a major fall from grace. Former Governor Eliot Spitzer was forced to resign in March after he was revealed as Client No. 9 for the high-end Emperor’s Club VIP prostitution ring. Spitzer had extramartial sex with Ashley Dupree, a k a “Kristen,” at Washington DC’s Mayflower Hotel. “Kristen” met with Client 9 the night of February 13, 2008, according to the affidavit, after describing herself as “petite, very pretty brunette, 5 feet 5 inches, 105 pounds”. They were finished, three hours and $4,300 later. (It may not have been Client 9′s first time there: he had a $500 credit.) Room 871 at the Mayflower Hotel was booked under the name George Fox, a pseudonym Spitzer had allegedly been using that was later revealed to be the name of his close friend, a hedge fund investor. Reportedly, some of this information came to light from a federal wiretap. Spitzer had at least seven or eight liaisons with prostitutes from the agency over six months, and paid more than $15,000 for their services. Federal agents had him under surveillance twice in 2008. According to published reports, investigators believe Spitzer paid up to $80,000 for prostitutes over a period of several years – first while he was attorney general, and later as governor. “Kristen” then called a colleague at the Emperors Club and said that she liked Client 9. “I don’t think he’s difficult,” she said. Spitzer’s problem – long before this news broke – is that there are plenty in New York who would disagree. After sweeping to power in Albany with a landmark victory – he took office in January, 2007 by winning 69% of the vote – he quickly engendered resentment for both his policies and management style. Spitzer was the architect of a widely unpopular plan to issue driver’s licenses to undocumented immigrants, and did not endear himself to constituents by squabbling with the Republican-controlled State Senate, and particularly the body’s majority leader, Joseph Bruno, whose camp accused the governor of deploying “dirty tricks” to smear his opponents. Spitzer further humiliated his wife, Silda in March by dragging her to his embarrassing press conference . The former governor resurfaced at the end of 2008 trying to write the “stale clean” by joining Slate.com as a writer. Sad for us, the new column doesn’t dispense romance advice, but focuses on the need for financial and government reform. Ironically, Spitzer attended Slate’s holiday party held at former Chinatown massage parlor called Happy Endings. No, I did not make that up! Sad, but true!

9. O.J. SIMPSON

In September 2007, Simpson was arrested in Las Vegas, Nevada and charged with numerous felonies, including robbery with a deadly weapon, burglary with a firearm, assault with a deadly weapon, first-degree kidnapping with use of a deadly weapon, coercion with use of a deadly weapon, conspiracy to commit robbery, conspiracy to commit kidnapping, and conspiracy to commit a crime. As the world watched O.J. again, a jury found Simpson guilty of all charges on October 3, 2008; and he was sentenced on December 5, 2008 to at least nine years in prison. In 1995, Simpson was acquitted of the murder of Nicole Simpson and Ron Goldman after a lengthy, highly publicized criminal trial. A 1997 judgment against Simpson for their wrongful deaths was awarded in civil court by a jury, but to date he has paid little of the $33.5 million judgment.He gained further notoriety in late 2006 when he wrote a book titled If I Did It. The book, which purports to be a first-person fictional account of the murder had he actually committed it, was withdrawn by the publisher just before its release. The book was later released by the Goldman family and the title of the book was expanded to If I Did It: Confessions of the Killer, with the word “If” reduced in size to make it appear that the title was “I Did It: Confessions of the Killer“. Orenthal James “O. J.” Simpson (born July 9, 1947)(also known as The Juice) is a retired American football player, actor, spokesman, and convicted felon. He originally attained fame in sport as a running back at the collegiate and professional levels, and was the first NFL player to rush for more than 2,000 yards in a season, a mark he set during the 1973 season. Too bad we never get to hear about his athletic heroics any more because his off the field crimes muddy it all.

10. ROD BLAGOJEVICH

On December 9, 2008, Illinois Governor Rod Blagojevich was arrested by FBI agents and charged with conspiracy to commit mail and wire fraud as well as solicitation of bribery. The Justice Department complaint alleges that the governor conspired to commit several “pay to play” schemes, including attempting to sell President-elect Barack Obama’s vacated United States Senate seat to the highest bidder. As a result of the arrest, Blagojevich has faced calls for his resignation or impeachment and removal from office. At a press conference in late December, he claimed he will fight to hold the seat of Governor and he exclaimed he has done absolutely nothing wrong. Others beg to differ. He has been the target of multiple federal investigations and has historically low approval ratings within Illinois; Rasmussen, the top political analyst, called him “America’s Least Popular Governor.” The Governor was taped by the FBI saying that he considered Obama’s vacated U.S. Senate seat “f – - – ing valuable.” He allegedly spoke with Obama chief of staff Rahm Emanuel 21 times, and ensnared Congressman Jesse Jackson Jr. as one candidate under consideration for the seat. “Hot Rod” was overheard attempting to force Chicago Tribune to fire editorial writers or risk losing city backing for sale of Wrigley Field. Blagojevich’s equally foul-mouthed wife Patti endeared herself to Chicago White Sox fans when she was over heard saying on tape, “F – - – the Cubs!” Fair and impartial observers are torn over whether Blagojevich is 1) crooked, 2) crazy or 3) stupid, given that he has known that he was being investigated for years – yet still openly discussed these schemes over the phone!

Remember, do the right thing when your reputation is in crisis and seek the counsel of an experienced reputation management expert. It will be a major challenge, but ultimately the rewards of repairing your reputation will be great. Why? Because Your Reputation Is Everything!™

blagojevich, bush, finacial crisis, fuld, madoff, palin, simpson, spitzer, top 10 list

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