"The Blood Sporting of Picking Off CEOs"

A crisis manager on how Wall Street’s “Mogul-Pariahs” are trying to salvage their reputations—and avoid the orange jumpsuit

As someone who has spent his career in the cockpit of corporate crisis management, I assure you that Wall Street's Masters of the Universe won't spin their way out of today's financial crisis. Somewhere along the line, Americans developed an evangelical faith in the power of public relations, irrespective of whether image-making sleight-of-hand in the face of disaster actually works. PR has value around the margins, but it's not the antidote for this.

All over Wall Street, the newly decreed Mogul-Pariahs are assembling their dream teams: attorneys, PR people, assorted consultants (and often a trophy wife), all reputed to be the best. Their mission is to save the Mogul-Pariah from the twin perils of crisis: denial and delusion. By focusing on the abstraction of image, the principal at first ducks the notion that something is wrong at the core of his existence and persuades himself that there was no original sin, only a misunderstanding that can be corrected by better communications.

The lily-white Mogul-Pariah joins an “inner-city” church. The oilman airs soft-focus ads promoting wind power (wind is about right)… As with a mugging, the Mogul-Pariah’s goal isn’t to save his fortune or image, it’s to get out alive.

So in the early stages of the crisis, flacks have the Mogul-Pariah's ear, urging him to tell your side of the story and get your message out. Someone may archly suggest a call to 60, insider PR-speak for CBS's 60 Minutes, in the hope that one of its correspondents, who travel in the Mogul-Pariah's social stratum, might want to flush his or her journalistic reputation down the toilet because of some clubby sympathy. Not likely. So if 60 does offer a sit-down, cooler heads will convince the Mogul-Pariah to decline.

Day after day, the Mogul-Pariah watches cable-channel pundits declare the crisis to have been mismanaged. It dawns on him that these bloviators are not neutral parties, they are investors in his peril. I call this the meta-crisis where these investors only win if the crisis is perpetuated. When JetBlue cancelled more than 1,000 flights during a 2007 Valentine's Day snowstorm, a television interviewer asked me, "Why is JetBlue in such a mess?" I answered, "Because you keep inviting guests on asking them 'Why is JetBlue in such a mess?'"

Then the Mogul-Pariah sees what now stands behind broadcasters are the feds, and it finally hits him: Nobody wants to hear me out—they want to disembowel me!

The Mogul-Pariah is obsessed with his reputation until faced with trading silk pajamas for an orange jumpsuit. This is more than paranoid magical thinking, The Washington Post has just reported that federal prosecutors will likely seek criminal indictments of individual executives as opposed to corporate entities. Then the discussion of talking points urgently shifts to admonitions from counsel that the Mogul-Pariah, who could not fathom at first that he might be accused of a crime, keep his mouth shut.

The flack now advises the Mogul-Pariah to apologize, until the lawyer points out that an apology could be used in court as an admission of guilt. The goodwill suggestion that he give back some of his bonus is rejected for the same reason: it might be mistaken for culpability. And that introduces the brontosaurus on the boardroom table: the dream team's fees, which could run has high as $50 million, not including penalties and civil settlements.

The bulk of these fees will—rightly—go to the lawyers. Other members of the team may generate six-figure invoices. It's advisable to get paid up front, because these dream teams are often nightmares. Traditionally, everybody hates everybody else, and they plan from the start how they're going to position a bad outcome when rival vendors start circling the carcass.