Cemetery Owner Faces Grave Crisis

A Ragan Communications blog asks the question, "Is it too late for a cemetery owner to perform crisis communications after employees at the cemetery dug up graves and resold plots for cash?" (http://blog.ragan.com/prjunkie/2009/07/was_cemetery_owners_crisis_com.html) The writer didn't really answer the question, so I'm going to weigh in with a response of my own.

Four workers have been charged with digging and dumping some 300 bodies so they could resell the plots. At first it seemed curious to me why Perpetua Holdings, the owner of Burr Oak Cemetery in Illinois, would keep mum about a crisis that was perpetrated by some employees. Perpetua did nothing wrong. In fact, it was a victim of this crime. Perpetua itself contacted authorities six weeks ago to report financial irregularities involving cemetery employees. Nevertheless, the company would only comment through its attorney. WGN radio in Chicago reported, “Perpetua Holdings of Illinois, Inc. has owned the cemetery since 2001. Trudi McCollum Foushee, a Missouri-based attorney for company president Melvin Bryant of Richardson, Texas, would only confirm the company went to police, triggering the investigation.” That was it.

Until this statement from Bryant, issued through Focus Communications, came out Tuesday:

"I certainly agree with what Sheriff Dart in Chicago has said. As he has concluded, the criminal conduct by former employees of Burr Oak Cemetery was absolutely despicable. I extend my heart-filled sympathies to all of those who have loved ones buried at Burr Oak Cemetery. I also have family members buried in the Cemetery and share the same outrage toward the conduct of the individuals.

"As a management consultant to and president of Perpetua, I conducted an investigation which uncovered financial wrongdoings by the Director of Operations which led to her termination in March. The information was turned over to the proper authorities.

"Neither I nor Perpetua, or its investors have benefited from the criminal conduct. We understand the historical importance and legacy of Burr Oak Cemetery and want to build upon it -- not see it destroyed by criminal wrongdoing.

"Out of respect for the ongoing criminal investigation and pending lawsuits which include me in Chicago, there are no other comments but we will continue to cooperate fully with the authorities."

According to the aforementioned Cook County Sheriff Tom Dart, however, the company has not been cooperative at all. No one from the company has even been to the cemetery since he and an army of sheriff recruits declared the cemetery a crime scene last week. "I have been running the cemetery," Dart said at a press conference Tuesday, "and that is obviously not what should be going on here.... If it is your company, your corporation, you would have a team in here sifting through the records, beginning to try to put things back together." (http://abclocal.go.com/wls/story?section=news/local&id=6916455&rss=rss-wls-article-6916455)

Among the atrocities, Dart and his team found incomplete records and plot cards, which identify where bodies have been buried, kept in a rusty and molding filing cabinet. The FBI admits it's likely many of the bodies and parts will never be identified. Investigators using poles to test the depths of intact burial vaults have found that they only go down a foot or two, instead of the required nine feet.

Now for the question again: Is it too late for Perpetua to wiggle off the hook? I say yes. The company already has said in its lone statement that it would have no more statements. That's not going to help matters. I'm wondering if the reason for such an inadequate strategy is so Perpetua and its management won't incriminate themselves. So how is Perpetua faring in the court of law and the court of public opinion so far?

• A judge today ruled he would appoint a third-party receivership to operate Burr Oak Cemetery. "I need to keep a very short lease on this case," Judge Stuart Palmer said at a hearing Tuesday.
• State officials sued Perpetua for consumer fraud and violations of multiple laws related to the funeral and burial industry. The lawsuit claims the company faces penalties of $50,000 per violation of consumer fraud laws. One family so far filed a civil suit.
• The Illinois comptroller's office on Monday froze almost $2 million in trust funds controlled by Perpetua for the operation of Burr Oak and another cemetery Perpetua owns in Calumet City, Illinois.
• The comptroller already has proposed state legislation to tighten cemetery regulation, including first-time state licensing for cemeteries and their staff members. (Now other cemeteries in the state may have a crisis of their own.)
• The comptroller also is pressing to have Perpetua's second cemetery's license revoked, leaving the company unable to sell plots in either cemetery.

As of Monday, the sheriff''s office reported 12,000 information requests filed in-person, 37,500 calls to hotlines, and 4,000 e-mails. By Tuesday afternoon, the phone inquiries jumped to 57,000.

So what do you think? What are the odds that Perpetua can pull itself out of the fire? I'm betting against it.

Cyber Attacks Should Warn Us We Need To Be Ready, Too

The cyber attacks against government and other web sites this week have been an inconvenience for some, but not much worse than that. Some agencies were better prepared and continued to function. Others went down for a relatively short time. Other sites, like the Transportation Department, were down for a couple of days.

What no one in government seemed to be prepared for was crisis communications. I base this on an Associated Press story on the MSNBC website (http://www.msnbc.msn.com/id/31800532/ns/technology_and_science-security/wid/11915829?GT1=40000), at least four days after the government knew it had a crisis:

• "Two government officials acknowledged that Treasury's site was brought down, and said the agency had been working with its Internet service provider to resolve the problem. The officials spoke on condition of anonymity because they were not authorized to speak on the matter."
• "Ben Rushlo, director of Internet technologies at Keynote Systems, said problems with the Transportation Department site began Saturday and continued until Monday, while the Federal Trade Commission site was down Sunday and Monday." (Why is no one from Transportation or the FTC talking?)
• Dale Meyerrose, former chief information officer for the U.S. intelligence community, said at least one of the federal agency Web sites became saturated with as many as a million hits per second per attack — amounting to 4 billion Internet hits at once. He would not identify the agency.... Meyerrose, who is now vice president at Harris Corp., said federal officials are divided on the whether a botnet was involved.... (We have to go to unofficial spokespersons for information?)

My point is that, except for a White House spokesperson, no official government people are quoted in the article. Maybe there's a legitimate reason, and if I hear one, I'll amend this post. But I was struck by the broad range of experts cited in the story and the few government spokespersons with statements days after the problem was known. Is it because of the direction the reporter chose or was it the lack of availability of government people who should have been more visible in adding accurate information to the story?

Ask your IT people or host. Are you ready for a cyber attack? Every company has its detractors who, if able, would love to make your life miserable. Are your defenses up? Your crisis plan should have a section for cyber attacks, because hackers find new ways all the time. The plan should include how you will communicate if your website is attacked, and also how you would deal with someone penetrating your data and stealing or sabotaging it. Either way, your phones will light up with stakeholders wondering what's going on. Before that happens, you need to know what to say and how to disseminate those messages.

Apple's Information Doesn't Fall Far From the Tree

When is secrecy a good thing in business and when does it become a liability? I once worked at the Department of Energy's Hanford site near Richland, Washington. That's where plutonium for nuclear weapons was made. All kinds of research went on there with national security ramifications. I needed security clearance before I started working. I needed a badge to enter the reservation and even to enter the Federal Building, where the newsletters I produced were laid out. Security and secrecy were critical there.

Secrecy also is necessary for companies developing new and improved products and hatching out marketing schemes they hope will take customers from the competition. But it seems that Apple takes secrecy to the point of paranoia.

An interesting article in the New York Times a couple weeks ago (
http://www.nytimes.com/2009/06/23/technology/23apple.html?_r=1) described the lengths the company takes to protect secrets and punish those who leak information. You need not look past the hush-up around the illness of CEO and co-founder Steve Jobs. We now know (or think we know) that he had cancer and a liver transplant. But as far as employees, shareholders, and investors knew, Steve was just out of the building for a while. I guess that's where Governor Sanford got the idea to pull his disappearing act last month.

Jobs is a very private person, and that's fine. But that privacy extends to unhealthy levels throughout the organization. "Secrecy at Apple is not just the prevailing communications strategy; it is baked into the corporate culture," wrote Brad Stone and Ashlee Vance in the NY Times article. "Employees working on top-secret projects must pass through a maze of security doors, swiping their badges again and again and finally entering a numeric code to reach their offices, according to one former employee who worked in such areas. Work spaces are typically monitored by security cameras, this employee said. Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful, he said."

Yeah, I did that with the Rockwell News at Hanford. Here are some other ideas that I think Apple takes too far:

• The senior vice president for marketing sometimes holds meetings with staff at which he discusses some confidential information that is incorrect. If news carrying the incorrect information gets out, Apple tries to track down the source.
• Five years ago, Apple sued several bloggers who wrote about the company, claiming they had violated trade-secret laws and were not entitled to First Amendment rights. Apple lost.
• Apple sued another blogger and settled out of court on the condition the blog be shut down. (Steve, I do have a price in mind if you want your lawyers to call me.)
• Apple chooses not to take advantage of blogs and Twitter to talk about itself and its products as many companies are doing now. Apple's communications with the media, the public, and even its shareholders and business analysts is tightly limited and filtered. The only exception is the launch of new products.

Tightly guarded secrets certainly add to the buzz when Apple unveils the latest and greatest something that no one in the public, the company, or the industry anticipated. But I have to question the overall business practice. Governance experts are debating if Apple owed its shareholders an explanation of how ill their leader really was. The death of a CEO, especially one who plays such a key role in the organization, is a crisis. In such cases, shareholders and analysts will be watching to see how smoothly the succession in the big upstairs office goes. A stumble likely would have some impact on stock values.

Internally, there's a matter of trust. I would resent being lied to in order to test my loyalty and honesty. As a business analyst, I would have a hard time not recommending Apple to my clients, but how do I know that some crisis or poor business strategy isn't going to decrease share value? I wonder if the SEC is at all concerned with this lack of transparency? Is all the legally required information being disclosed? I'd love to know if Apple has a crisis plan. My suspicion is the only plan is in Steve Jobs's head.

A company should keep some secrets. And it doesn't have to hang all its dirty linens on the line to dry. But it needs to be up-front enough for employees to feel like they know what's going on, for analysts to make informed decisions, for shareholders to feel confident in their investment, and for reporters to trust they are being dealt with fairly and honestly. Apple isn't an environment I would feel comfortable in as a communicator. I'd rather go back to the plutonium factory where the secrets really are worth protecting.

School System Report Says Coach Not Responsible for Player's Death

After 10 months, Jefferson County Public Schools today released the results of its investigation into the death of Max Gilpin, the Pleasure Ridge Park football player who collapsed at a hot August practice and died three days later.

The police report, completed long ago, concluded there was enough evidence to charge Coach Jason Stinson with reckless homicide. The JCPS study states that the coaching staff followed all rules and policies, including allowing plenty of water breaks. Stinson's trial begins August 31. In addition, he has been sued by Max's parents.

The report includes an interview with Dr. Daniel Rusyniak, a professor of emergency medicine at the University of Indiana and a specialist in medical toxicology. He says all the evidence shows that Max was fully hydrated when he was taken to the hospital and after he arrived. He cites a number of more likely causes, including a pre-existing illness caused by a bacterial infection. The JCPS report says the hospital form filled out by Max's parents shows they mentioned that Max hadn't been feeling well that day. The parents now say he was totally fine.

One of my posts on this topic included criticism of JCPS for waiting an entire week after Max collapsed before launching an investigation. Interviews with coaches and players took months. We know how people's memories of events change over time. Here comes a big surprise: JCPS laments in its report that the accounts of the witnesses varied widely, and it based its conclusions on the total weight of the evidence. I'm not accusing the district of anything. I just started reading the report. But if it were me writing that report, whose testimonies are going to get most of my weighting? We all do it. We look for evidence that supports our conclusions and ignore others.

I hope Stinson is acquited. I hope he wins the civil suit. I'm sorry for Max's family and friends. And I hope JCPS has learned some valuable lessons from all this.

Proliferation of Photo Devices Means We Could Be on Candid Camera at Our Worst Moments

I don't mean to beat a man when he's down. But there's an interesting social media issue involved here that is worth exploring.

Larry Wilder was, until a few days ago, the city and school district attorney for Jeffersonville, Indiana. He was photographed early in the morning on June 17. He had been partying and drinking with a friend the night before. His neighbor called police when he discovered Wilder passed out head first in his garbage can. Wilder wasn't charged with a crime. We never would have heard a thing about it if someone hadn't released a police photo of Wilder to the media. He resigned his public posts a week later.

The question in Jeffersonville now is who released the picture? Mayor Tom Galligan is urging the police to continue its investigation into how the pictures got to the media. He wants a new policy to prevent release of embarrassing photos of people not charged with a crime.

Okay, that might be effective in some cases. I'm not sure it's worth such a long investigation. What would the mayor have done if the neighbor had taken the picture with his cell phone? What if a passer-by had seen him in the can and took a picture because it was unusual. Many ways are available now to embarrass us electronically. It happens many times every day, intentionally or not. Go ahead and write your policy for city employees, Mayor Galligan. Just say "Don't do it" and establish penalties for those do. But it's not going to solve all that much.

My solution: Don't get drunk and sleep in garbage cans. Those of us with reputations to uphold, and those who someday might want to protect their reputations (That goes for you kids on MySpace, Twitter, etc.), need to stop doing stupid stuff and then not be sloppy enough to get caught at it. Our organizations we serve have to live the same way. Do all you can to protect your company's bottom line and its reputation by carefully scouring the horizon for future embarrassments that lead to smoldering and then to sudden crises.

League of Cities Tries Novel Approach to Managing a Crisis

I wrote on June 17 here, and mentioned it in passing just below, about the Kentucky League of Cities, which is charged by the state auditor and a series of newspaper articles with spending member cities' dues on exorbitant trips for executives and spouses. I concluded with, "You better be ready to explain (the benefits of all this travel) to the KLC board at its June 19 meeting. Stay tuned."

Well here's the update. If you read much of my stuff here, or attend an Institute for Crisis Management presentation, you know we always stress being transparent and having a tested crisis plan that lets you quickly contact your constituents. KLC must not be reading this. The board's response to questions about wasteful spending: To declare that KLC is not really a public agency after all, and therefore doesn't have to release any of its financial records under open-records requests. It was going to bar the Lexington Herald-Leader reporter from its June 19 meeting, but ultimately backed off. (http://www.kentucky.com/klc/story/843038.html)

This has to be one of my favorite crisis responses of all time! You know the Herald-Leader will be on the attorney general's doorstep with this one. A 1993 ruling on the Kentucky Association of Counties (Read the post right below to see the hot kettle of soup that group is in.) said KACo was a public agency because it received at least 25 percent of its revenues from public sources.

The Herald-Leader article doesn't say whether going private was a board decision, a management decision, or a board decision after management bullying. I suppose the answer is immaterial. The board is supposed to have an obligation to be sure staff is spending money appropriately. That's a big part of what boards do, isn't it? What could these people be thinking? The top three officials of KLC spent more than $304,000 on travel in three years. Executive Director Sylvia Lovely has a compensation package of more than $315,000 and is provided with a BMW SUV. (I hope it's the cheap model. See post below.) The board, by the way, doesn't determine salaries. With all this being played out in the news, the board seems more concerned with stopping the news reports than in stopping inappropriate spending.

If KLC had a crisis plan -- make that a good crisis plan -- the board and leadership could open it up to the appropriate section and realize, "Hey, The Herald-Leader isn't at the top of the list of key stakeholders. Neither are its readers. Fighting the paper won't help our position. We need to be communicating with mayors, councils, city managers, and all the key people in our member cities who pay our bills. If they lose confidence in our money-management ability, they may drop out, form a different organization or -- gasp -- fire us. We need to be communicating more, not less. That means remaining open to reporters instead of looking like we have something to hide."

Plan or no plan, KLC should have been politically astute enough to recognize that their plush salaries depend on pleasing their customers. If I am held accountable for how my city spends its money, I wouldn't be a very pleased customer right now. And KLC leaders need to do the right thing by re-opening their doors and books before the attorney general forces them to do it anyway.

Another Lexington Organization Caught With Its Pants Down

Lexington, Kentucky, must be a very quiet place. There isn't a single accountant or auditor living there. Boards who have responsibility for quasi-government agencies there apparently don't say very much, or if they do, they're apparently hushed. No, the only people living in Lexington are executives and news reporters.

How else would you explain the reason why the Lexington Herald-Leader was the first to let us know that officials at Blue Grass Airport were running amok with credit cards charging for personal services. (And just what personal services were involved at that Texas strip club that cost $4,000?) Or how about the Lexington Public Library's financial improprieties? In June, I wrote about the paper's disclosure of unreasonable travel expenses at the League of Kentucky Cities. Now it's the Kentucky Association of Counties' turn in the spotlight.

KACo provides lobbying support and insurance to member counties in the state. In an article by Ryan Alessi (http://www.kentucky.com/1066/story/843181.html), he reports that when six KACo employees went to Washington, D.C., in March 2008 "to attend a conference and lobby officials, the $31,700 trip included two dinners totaling $4,277 and a $10,000 cancellation fee for hotel rooms that weren't used."

"In all, the association's top five executives racked up nearly $600,000 in travel, entertainment, and other expenses over the last two years. More than half was charged on the credit card of Executive Director Bob Arnold."

The article claims that while KACo officials were spending and receiving raises, it boosted insurance rates for financially strapped counties. This isn't to say Arnold hasn't had to make certain sacrifices to be more frugal: "'I will say this: (I drive) a BMW, but it is an X3, which is the low-end BMW SUV.'"

"The current president and head of the KACo board, Christian County Attorney Mike Foster, instituted a more stringent approval policy for travel expenses in March after the Herald-Leader filed a request for the organization's expense records. Previously, no one person examined all expenses."

No state or regulatory agency oversees KACo's finances. It seems like someone out there pouring tax payers' money into this group would have wanted a look at how the money was being spent. The Herald-Leader wanted to know. Why didn't anyone else, even board members?

If you're a quasi-government organization in the Lexington or Frankfort area, you are in a smoldering crisis. You should have gotten the message after the airport and the library investigations. You need to ensure you have a financial process that contains checks and balances so no one can abuse the system. In your crisis communications plan, you need a section that tells how you will deal with accusations of misuse or theft. It should contain your primary stakeholders and how to reach them, a holding message for the media until you can get the facts straight, and how you will continue to follow-up to keep the confidence of all your key audiences.

And if you live in another city, big or small, and some reporter writes an in-depth expose about an organization that has any similarities to your own, You too are in a smoldering crisis. You need to act now.