Tuesday, June 30, 2009
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.
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.
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.
Saturday, June 27, 2009
Metro’s board of directors approved the day after the crash an emergency hardship relief fund of $250,000 to provide financial relief to the families of the victims of the collision to help with medical, funeral, and other expenses. According to Metro's web site, "Individuals seeking emergency hardship relief fund assistance and customers who were onboard one of the trains involved in the collision and are seeking to file an injury claim should call 202-962-1681." Metro also has a standing Memorial Scholarship Fund to honor employees who have died in the line of duty and assist with the education of their dependent children.
We find at the Institute for Crisis Management that organizations who show they have a heart and a conscience end up better in the court of public opinion, and usually in the court of law as well, than those who listen too closely to legal counsel who advises to say nothing.
Compare Metro's response to that of a comparatively minor train derailment I have blogged about here throughout June. The Louisville Zoo's web site announcement hasn't been updated since its train derailed on June 1. As soon as the first lawsuit was filed, information dried up. Do you think there will be any civil suits filed over the Washington collision? Just as fast as you can say writ and tort. But the Metro system is doing the right things to minimize legal damage and return the system to a normal schedule -- which it did today, five days after the deadly crash. As for Louisville's zoo train? Granted, it's not an essential medium for commuting to work. But 26 days later and the zoo train still isn't generating any revenue for a money-strapped organization.
These are all examples of personal political crises. But they also have an impact on how government operates and how the party at fault picks up the pieces of credibility and has to move on. Politicians, parties, and government entities need to prepare for crises. Just ask Larry Smith, president of the Institute for Crisis Management. He was once the communications director for Dan Quayle when he was Senator. Remember? P-o-t-a-t-o-e?
Saturday, June 20, 2009
That's the strategy of a California couple. The pair was upset because it didn't get free grilled chicken from KFC after Oprah Winfrey promoted a free grilled chicken day. (See my May 8 post.) So they decided to sue Yum! Brands, claiming the offer of free food was a bait and switch ploy, even though the company offered rain checks to those who were unable to redeem their downloaded coupons.
We live in the only litigious culture in the world. Where else would a corporation be sued over three or four dollars of chicken? Watch for more suits to follow.
That's good. But the judge blocked public release of the Jefferson County Public School District's (Kentucky) investigation until it is complete. (www.courier-journal.com/apps/pbcs.dll/article?aid+2009906190352) Complete? It's already taken nearly a year, and a half year longer than the police investigation. The Commonwealth attorney's office had to take JCPS to court before the district would share its information. What are the odds now of JCPS wrapping up this investigation anytime soon?
This is a classic smoldering crisis. JCPS continues to fan the flames instead of being open and transparent.
Wednesday, June 17, 2009
Through an open-records request, the Lexington Herald-Leader disclosed a pattern of excessive spending on travel and meals by Lovely and her top staff members. She and other executives often take their spouses with them on business trips at the organization’s expense. That has cost KLC $19,000 in three years. In all, Lovely and her two top aids spent $300,000 in travel expenses in three years. KLC executives were reimbursed $21,000 for three years’ worth of meals at one restaurant. That restaurant is owned by Lovely’s husband.
Crit Luallen, state auditor, wrote a letter on June 10 to Richmond Mayor Connie Lawson, chair of the KLC board, urging changes in fiscal accountability. "I have included a copy of these recommendations for the League's Board to review. You and your fellow members will find that this document outlines various recommendations my office distributed after our audit of the Lexington Blue Grass Airport in February."
By the way, the Blue Grass Airport audit Luallen refers to was a staff over-spending crisis I blogged about last winter. It was brought to light by -- again -- the Herald-Leader. It's too bad the Herald-Leader reporters aren't on these boards of directors, who clearly aren't doing their jobs. If the Herald-Leader gets suspicious, why don't board members? Non-profit boards can be a source for smoldering crises unless someone stays awake during meetings.
You better be ready to explain it to the KLC board at its June 19 meeting. Stay tuned.
Another story in Louisville that has received national attention is the Max Gilpin tragedy. He died last August from the heat after collapsing during football practice at Pleasure Ridge Park High School. I was critical of Jefferson County Public Schools for waiting an entire week before beginning an investigation, which the district says is nearly complete -- 10 months after the incident and half a year after the police completed their investigation and charged Coach Jason Stinson with reckless homicide. The commonwealth attorney's office now has taken JCPS to court because the district refuses to release results of its investigation, which supposedly includes interviews with every football player and coach. Stinson's trial starts August 31, and the JCPS investigation results would be useful, either in getting a conviction or an acquittal.
Thursday, June 11, 2009
Tuesday, June 9, 2009
Yet. I'll explain in a moment. How is the zoo doing so far with its communications? I think pretty well, but there are a couple of holes and some ominous threats looming that the zoo better be preparing for.
One of these threats is the public release of the investigation report. So far, the zoo looks squeaky clean: Its inspections are in order and documented, and findings from those inspections have been addressed. But the crisis team needs to be ready in case the report finds the zoo at fault in any way.
John Walczak, the zoo's director, sent an e-mail to members yesterday, which led to an article in today's The Courier-Journal (www.courier-journal.com/apps/pbcs.dll/article?AID=2009906090399). He announced a full safety investigation of all the zoo's attractions, including animal management. (An aside: a mountain lion escaped his exhibit in a Kansas zoo during feeding a couple weeks ago. It happens.) He should have announced this safety check a week ago, but at least eventually he did it. He said the zoo has received many calls and questions. I can't tell for sure whether that led to the e-mail or to the investigation. Probably both.
I mildly criticized the zoo in the post last week for looking like it was hiding something about the train operator. In today's article, the zoo was a bit more forthcoming. A spokeswoman confirmed that the driver was 18, the minimum age in the state allowed to operate amusement rides. The young woman had completed 20-30 trips with an experienced driver, which is the average for new drivers, she said. Last week, Assistant Director Mark Zoehler placed that number at 30-40, then stepped aside from any other questions about the driver. A minor discrepancy, a more significant lack of transparency.
In this same article today, zoo officials repeated there have been no other train derailments in the past two years, as I wrote below. Here's where the next threat comes, and I believe this is fairly likely. Just a few days before the derailment, the zoo staff notified employees about the layoff of 21 employees come November. This is unprecedented. To make matters worse, all are union members; none are managers. Supervisors who will lose employees weren't consulted about the minimum number of staff it takes to keep the zoo open all winter. Do you see where I'm headed? Whistleblowers.
It happened this afternoon. Page One Kentucky, a blog that prides itself in digging up dirt on government, (http://www.pageonekentucky.com/) posted an item called "Louisville Zoo Employee Spills the Beans." This person claims to have driven the train for a number of years (Does that make him or her a whistle-blowing whistleblower?) and said it comes off the track "all the time," particularly at the point where it derailed June 1. Another employee told me the same thing last week. The post concludes, "...it seems like someone at the zoo is trying to keep the whole story from coming to the light of day. And that concerns us a great deal." The post could be picked up on by a reporter. It's quite conceivable that this person or someone else will contact the media to share their side of the story. Without a response plan in place, the zoo will be unprepared to limit the scope and breadth of this aftershock.
Managers and supervisors reportedly were told at a meeting Friday not to speak to reporters or even family members about the derailment. That's not realistic under any circumstances, but it's even more outlandish in the days of blogs and tweets. The zoo's spokeswoman and managers need to be anticipating these and other threats that could sink its reputation.
Thursday, June 4, 2009
The zoo's train was carrying about 30 visitors on its circular run Monday when it jumped the tracks and tipped over. Twenty-two people were hospitalized, 17 of them children. A toddler and her father remain hospitalized today, three days later. The Department of Agriculture is investigating the cause.
This is a crisis you know will have many aftershocks that will keep the zoo in the news for days and probably weeks. The aftershocks include updates on conditions of the victims, the inspector's report, what steps are being taken to prevent a recurrence, and the first day the train is reopen for rides, just to name a few of the givens. If there are individual or class action suits filed, there's another aftershock. If the zoo is found to be somehow at fault, there's a huge aftershock. So far, the public sympathizes with the zoo. Not so, probably, if there's negligence.
Let's look at the zoo's response so far. Kara Bussabarger has served as the zoo's spokesperson and seems to me to have done a good job dealing with the media and the original story. The zoo has been able to communicate its concern for safety -- the daily and annual inspection of the trains and track, training for operators, and the 35-point checklist drivers must complete before the first departure. One TV station asked some zoo visitors if this accident would make them afraid to ride the train in the future, and both said basically that even in the best of all worlds machines break. They wouldn't have concerns. No one yet has vilified the zoo in any way.
Aftershock #1: WHAS-TV dug deeper for its newscast on Wednesday, June 4. (http://www.whas11.com/news/local/stories/whas11-topstories-090603-train-past.45f629fc.html) Through an open records request, it learned that an axle on the train broke in 2007, injuring one passenger. The station also dredged up the state inspection records for the past two years. In 2008, inspectors found loose track and rotten cross ties. In its January 2009 inspection, the state ordered replacement of at least 106 ties and tightening all loose rails. Bussabarger told WHAS the zoo completed all the orders from the 2008 inspection and all but one from the 2009 inspection.
It looks like Bussabarger was ready with a response. When you are involved in a big story like this one, you need to be ready to clean the ghosts out of your closet, because there's a good chance someone will find them. Have responses ready, or let those ghosts out yourself to remain credible. This has become a national story and one worth watching to see how well the zoo comes out of it.
One more comment I want to make before I sign off. This can be a tough thing to do, but consider ways to caution employees about talking and speculating in front of others. This is especially challenging to overcome in a setting like the zoo where employees may be in virtually constant contact with the public. According to a day-one report on WHAS, "Several people inside the zoo told WHAS11 News they overheard zoo workers talking about possible brake failure and the fact that the train had switched conductors right before the accident." (http://www.whas11.com/topstories/stories/whas11-topstories-090601-train-derailment-zoo.3b67056c.html) Employees are going to talk. Advise them to do so in private, especially if they don't really know what they're talking about.
The Institute for Crisis Management just came out with its Annual ICM Crisis Report for 2008. The report is based on scans of 1,500 news sources worldwide, including newspapers, business and financial wires, regional business publications, and trade publications. Crises are coded into 16 categories, and businesses, non-profits, and government organizations are identified. Then we crunch the numbers and compare with past years, looking for trends in crises. You can read the 2008 report at http://www.crisisconsultant.com/2008CR.pdf.
Overall, the number of business crises was up only slightly last year. In fact, the past four years have been uncharacteristically consistent. But there were significant increases in eight of those 16 categories.
In 1990, mismanagement and white collar crime accounted for 45% of all crises. In 2008, 27% of all crises fell into those two categories. I don't believe it's a case of less mismanagement and white collar crime, but an increase in some other categories. The percentage of facility damage crises has nearly doubled to 10%. Same for casualty accidents, now up to 9%. But the change I find most frightening is workplace violence, which was 4% of all crises in 1990 and 17% last year.
Probably everyone has a personnel policy that describes how the organization will deal with workplace violence. But does your crisis plan tell when you will communicate, to whom, and through which media? Violence clearly should be a concern, and may rise more this year with tension about paying bills, furloughs, and job security.
I will write more about the Annual ICM Crisis Report in future posts.