APCO Comes Under Fire After HP CEO Resigns

Shop No Stranger to High-Profile Crises

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NEW YORK (AdAge.com) -- In the wake of forcing its CEO Mark Hurd to resign amid allegations of sexual harassment and some falsified expense reports, PC giant Hewlett-Packard isn't the only party catching flak for what some believe to be an unwarranted dismissal. APCO Worldwide, one of the biggest independently owned PR shops in the world and counsel to HP on this issue, is also taking some heat.

Mark Hurd
Mark Hurd Credit: HP
According to industry executives who spoke to Ad Age, APCO was brought in by HP to provide public affairs counsel. APCO "was asked its view on how this would play out and that's what it gave [HP]," one industry executive with knowledge of the situation said. "APCO was not asked to give counsel on whether Mr. Hurd should be fired or retained."

But a report in the New York Times earlier this week has put some of the spotlight on APCO and Mr. Hurd's "departure" on the PR company's doorstep, even though the agency and its founder and current CEO, Margery Kraus, are highly respected within the industry.

When reached for comment, B. Jay Cooper, deputy managing director of APCO's Washington office, told Ad Age that "our policy is, we don't disclose our counsel to clients." Kent Jarrell, senior VP and the director of the litigation communication practice at APCO, is the lead on the HP account.

Mr. Jarrell is no stranger to working on high-profile crises. While at APCO, he worked on branding and positioning as well as crisis communications for WorldCom after the company named a new CEO and discovered one of the biggest incidents of financial fraud in history. He has also handled Merck's communication efforts on the Vioxx litigation. The agency has worked for World Wrestling Entertainment, Microsoft, Ikea, Bristol-Myers Squibb and Mercedes-Benz.

APCO was founded in 1984 by Ms. Kraus. In 1991 Grey Global Group purchased majority ownership of the agency, but 13 years later the agency, through a leveraged management buyout, bought itself back.

APCO has more than 550 employees, including former journalists, ambassadors, business and nonprofit executives, government officials, market researchers, and communication and internet experts, in 29 offices located in North and South America, Asia, Europe, the Middle East and Africa. According to its website, APCO specializes in a host of communications services such as branding and positioning, financial communications, executive and board communication, corporate responsibility, crisis management and issues management.

The Times report said that APCO executives laid out a scenario for HP board members that depicted the company suffering through months of humiliating news coverage, similar to that of Tiger Woods, should the sexual harassment accusations made by one of the company's contractors become public. The Times article went on to say that despite an investigation providing no evidence of any sexual misconduct, an APCO representative said HP would be better served by full disclosure.

Eric Dezenhall, CEO and co-founder of Dezenhall Resources, said he is sympathetic to APCO because there is always a danger in being associated with a crisis. Sooner or later everyone is labeled as a failure. "The thing that the PR industry doesn't understand about crisis management is there are no winners," Mr. Dezenhall said. "No one gets a high-five for getting slightly less mutilated. So the PR business, which is a business of positivity, really struggles with the idea that crisis management is about limiting negatives. The fact that APCO is being criticized doesn't mean a thing to me, because by virtue of being in the crisis management business, those are the hits you're going to take."

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