July 13, 2007 10:27 am : Comments 000
Well, it seems Wal-Mart isn’t the only retailer practicing deception on the Internet. John. P. Mackey, the vegan yogi CEO of Whole Foods Market, has been unmasked by the Federal Trade Commission as Rahodeb, an inveterate Yahoo message board contributor who touted the specialty retailer’s stock and had a certain fondness for its leader’s grooming. Rahodeb, I mean Mackey, reportedly posted more than 1,000 entries over a seven-year period.
In case you haven’t been following the saga, John Mackey wants to buy rival Wild Oats Markets, but the FTC wants to deep-six the deal. Mackey wants to deep-six the FTC. He has questioned the agency’s legitimacy and accused it of being “hostile and adversarial towards Whole Foods.”
Well, Mackey’s got that right. The Rahodeb disclosure was contained in a footnote of a document made public by the FTC late Tuesday and reported late yesterday by the Wall Street Journal Online. I can’t imagine where the little birdie came from who told the Journal to look for the footnote. Government bureaucrats can be awfully touchy when a CEO they are challenging publicly questions their ethics and integrity.
But let’s give Mackey his due. Wal-Mart reportedly pays Edelman some $1 million a year to come up with such ideas as the infamous “Wal-Marting Across America.” It appears that Mackey concocted and executed his deception all by his lonesome at no cost. Whole Foods’ shareholders gained further value for the $1 a year Mackey takes in salary.
From a crisis communications prospective, I also give Mackey credit for choosing to post a statement on Whole Foods’ website, rather than granting an interview to the Journal � he would no doubt have dug himself a deeper hole. But his unnamed spokeswoman did him in instead. “(Mackey’s) comments weren’t illegal” she told the Journal. Yes, but that begs the question, “does he still beat his wife?”
Mackey isn’t the only one with egg on his face (organic or otherwise). Ethisphere Magazine, a national magazine “dedicated to illuminating the correlation between ethics and profit” in May named Whole Foods “one of the world’s most ethical companies.” Step seven in the magazine’s methodology is to screen their pared-down list of companies through a Who’s Who of corporate watchdogs including The Business Council for Sustainable Development, The Center for Business Ethics, and several for-profit consultants and investment firms like The New Alternatives Fund, SustainAbility, and Winslow Management Company, among others.
Hmm… I look forward to seeing how a magazine focused on ethics handles its own public relations crisis.
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July 11, 2007 6:49 am : Comments 000
As originally posted on Strumpette.com on July 10, 2007.
How Julie Roehm Should Exact Revenge Against Wal-Mart
I know what it feels like to be wronged in the workplace and have images of legal retribution raging in your head. The incident happened many years ago, but my level-headed lawyer convinced me that “living well is the best revenge.”
So I have more than just a passing interest in the plight of Julie Roehm, the advertising executive who Wal-Mart fired for allegedly violating the company’s ethics rules. Roehm, too, feels she was wronged. But her preferred mode of revenge is the biblical kind, albeit with a twist: an eye for an eye, and a smear for a smear. Roehm isn’t just suing Wal-Mart for fraud and breach of contract – she also has accused the company’s biggest honchos, including CEO H. Lee Scott, of ethical conflicts. Underscoring her determination, Roehm has retained Michael “The flack when you are under attack” Sitrick. Pitting Sitrick against Wal-Mart’s army of Public Relations pros is the equivalent of hiring Robocop to take on The Three Stooges.
Given her nemesis, I instinctively want to side with Roehm. Wal-Mart is a company without a soul: It pays paltry wages and offers crummy health benefits, leaving a disproportionate percentage of its workers dependent on some form of government financial assistance. It takes great delight shaking down vendors (“Don’t ever feel sorry for a vendor” goes the company saying). It gets huge tax breaks and incentives to build its stores and then shutters them to build a bigger one down the road. Its sleazy PR tactics include the “Wal-Marting Across America” blog, supposedly penned by a couple of customer enthusiasts who turned out to have been bought and paid for by the company. (Yeah, I know the scam was Edelman’s handiwork, but Wal-Mart’s public relations people likely were in on the deception). I’m not inclined to believe anything Wal-Mart says, particularly if it involves a fired employee.
Yet as much as I want to believe in Roehm, a careful reading of her public comments and her court filings requires a dishonest leap of faith. Wal-Mart is quite explicit about prohibiting employees from accepting as much as a cup of instant coffee from vendors and potential vendors; this is an admirable and necessary policy for a company that actively does business in developing countries where bribery and corruption are rampant. So what was Roehm doing dining at New York’s trendy and expensive Nobu restaurant as the guest of the advertising agency she would eventually endorse (much less sitting on the lap of one of the ad execs)?
Roehm admits to the Nobu dinner – “Yes, Nobu! God, we went to Nobu!” – but insists she expected the advertising agency to bill her for the dinner. I’m troubled by this defense: Roehm essentially was relying on the good faith of a potential vendor to ensure compliance of Wal-Mart’s conflict-of-interest rules. My guess is that Wal-Mart’s bean counters would never have approved the Nobu dinner; by having the dinner billed back, the cost would likely have been buried in an invoice that Roehm herself might have had the authority to sign. Given that ad agencies typically mark up expenses, asking the advertising agency to bill back the dinner is fiscally irresponsible at a company that works on razor thin margins.
And then there are Roehm’s “easily explainable” emails to her married subordinate Sean Womack. Remember those? Here’s a refresher: “I think about us together all the time. Little moments like watching your face when you kiss me…” Roehm, who also is married, insists Womack is “like a brother to me,” and denies the two were romantically involved. Maybe I’m old fashioned, but when I want to send my love to my sisters, I just mail a Hallmark card.
Finally, there is Roehm’s outrageous and totally unfounded claim that “perhaps some (at Wal-Mart) did not like following or taking the advice of a woman.” Let’s be honest: the only gender issue here is the double standard that Roehm is benefiting from. The media wouldn’t take seriously a male executive who in an email to a female subordinate pined for her kisses.
Fortunately for Roehm, the facts no longer matter with Sitrick as her public relations bodyguard. Sitrick’s P.T. Barnum-esque “there’s a sucker born every minute” approach to media relations has been unbelievably successful. The infomercial he got 60 Minutes to do articulating his campaign against hedge funds who shorted the stocks of his clients is unquestionably one of the greatest media placements of all time. Just wait until Sitrick unleashes his “truth squads” on Wal-Mart. Don’t be surprised if Roehm remerges as a selfless whistleblower in the spirit of Enron’s Sherron Watkins (Watkin’s wasn’t a whistleblower either, but the media portrayed her as one).
Roehm will no doubt savor the coverage Sitrick orders up, but here is something she should consider: Eugene Melnyk, a controversial Sitrick client whose attacks on short sellers formed the basis of the 60 Minutes infomercial, in May disclosed that he received a so-called Wells notice from the Securities Exchange Commission, which signals the regulator intends to go after him. Fawning media coverage does not ensure legal success.
So here is my unsolicited public relations advice to Roehm. Drop your lawsuit, admit and learn from your mistakes, and get on with your life. Some of our nation’s most respected executives suffered the indignity of being fired or forced out of some very high profile jobs including Lee Iacocca, Sandy Weill, Jamie Dimon, and John Mack. They proved their mettle not by suing their former bosses, but going out and successfully competing against them.
Julie, trust me on this one – living well really is the best revenge.
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