MR PETER BINGLE AND MR MIKE GRANATT CB

6 MARCH 2008

  Q440  Jenny Willott: I think the suggestion is that all of those people would be on it.

  Mr Bingle: Trade unions, for example?

  Mr Granatt: I think it is an idea that could be put into place. I am not entirely sure what it would do, what it would achieve. That is the problem.

  Q441  Jenny Willott: I was going to ask, given the current climate around public unease about parliamentary rules, whether that would actually help the situation or just make it worse.

  Mr Granatt: Certainty is a good thing but if you create more uncertainty by creating a huge list that seems to have no great utility, I am not sure it makes things better.

  Q442  Jenny Willott: Final question: Bell Pottinger operates in the United States as well, I believe. Does Luther Pendragon have any operations in the States?

  Mr Granatt: We have affiliates, companies that we work with in the United States.

  Q443  Jenny Willott: Given that the rules are much, much tighter in the States than they are over here, I was wondering if there was any evidence that having those sorts of rules restricting your business opportunities in the States could cause problems for the clients over there.

  Mr Bingle: I am not really able to go into detail because my dealings in the US personally are nil because I am entirely UK-based.

  Q444  Chairman: But you must know. Goodness me!

  Mr Bingle: No, because Bell Pottinger in the States is linked to a different part of the group called Bell Pottinger Sans Frontie"res. That is the company which tends to deal with overseas companies.

  Q445  Jenny Willott: Would you be able to provide a note for us after the session about whether it is has had any implications on your business? We would find that very useful.

  Mr Bingle: Of course.[7]

  Q446 Chairman: Can I just say there has been a huge amount of comment on the tightening up of the regulation of lobbyists in the United States. You cannot switch on the television without Barack Obama talking about the role that he played in the legislation that went through Congress on lobbying. You do not follow what is happening in America very closely, do you?

  Mr Bingle: I am more focused on what is in the Budget for my clients.

  Chairman: I think that is astonishing. I have been following the American presidential case quite closely. It does not personally affect me. But there you go.

  Q447  David Heyes: We mentioned Chinese walls. Can you help us understand how these Chinese walls operate in your companies? How does it work?

  Mr Bingle: Company A, company B. Company A will have a director and two or three staff working on it. The same with company B; a different director, different consultants. The information in terms of the PC relating to both clients is security-locked, so any members of that account team can get access to the information about that particular client by password security. On that basis, it is entirely possible to work for two companies with a potential or a real conflict. We would only be in that situation if both companies were happy for us to be working for them. In the past I worked for a company called GPC,[8] which was known to have the best health team. They at the time worked for most of the British pharma-industry. All of the companies in that sector were aware of it, were perfectly happy; why? They had a very good health care team. In theory, lots of conflicts. In reality, the companies were perfectly happy for GPC to advise a number of health companies. It is two things. One is openness to both sides you are working for about the other company. Secondly, it is making sure that the two account teams are separate and distinct. Thirdly, it is making sure that in terms of the information about both—back to the CIPR code and client confidentiality—we would only allow one account team to have access to that particular client's commercially confidential information. Again, the loser if that were to break down would be us, therefore it does not break down.

  Q448 David Heyes: Is it similar in Luther?

  Mr Granatt: It is very similar. You make sure the information being held by the account team is confined to that account team. There are, of course, issues about making sure there are not conflicts of interest that would offend the CIPR code, for example. We rely on the fact that partners discuss regularly whether there are issues coming up within an account that they think would affect the reputation of the company or offend the code. We also make sure that if a client is not known publicly, and therefore may not be known to a number of people in the organisation, the partner responsible for the knowledge of that client makes sure by looking at what is coming up in terms of proposed new business and other activity that there is no conflict of interest.

  Q449  David Heyes: How do the CIPR monitor the workings and the validity of your Chinese walls?

  Mr Granatt: The CIPR do not, as far as I am aware, monitor companies or individuals directly. They rely on the fact that the code encourages people to report to the CIPR any breaches of the code.

  Q450  David Heyes: It is not surprising that you give that answer. We had the CIPR here a few weeks ago and they explained that with the 9,000-plus membership they have, it would be impossible for them to do detailed monitoring. They are not equipped to do that. It is light-touch monitoring. It is mostly self-monitoring and self-regulation. If that is the case, how is it that the CIPR are the right organisation to produce these codes and for you to try and work to their methodology?

  Mr Bingle: I have six directors, and they have a job in terms of line management and mentoring. We have a system whereby for somebody to go from being a consultant to senior consultant their behaviours are monitored and they are checked; there is regular interaction between the junior staff and the more senior staff. It is on that basis that we are monitoring almost day in, day out how our junior staff are behaving. We cannot afford any of our staff not to behave well at all times and in a company of 30 people you can monitor them day by day.

  Mr Granatt: Within our set-up we are appointing somebody who will be independent, who will look at the way in which we operate our code and how we do that, and will report to the board of directors every year on how that is doing, and will be available to anybody in the company on a confidential basis if they wish to report something they feel is a breach of the code.

  Q451  David Heyes: Basically, it is "Trust us. We are good chaps and it would be bad business to not create this system."

  Mr Granatt: I think it would be "Trust us, sir, because we do the best we can to make sure we are accountable."

  Q452  Mr Walker: Last time I checked we lived in a democracy, despite the best efforts of the current Government, and part of living in a democracy is the right to put your case to government, whoever you are, be you a private citizen or an organisation. So I do not believe lobbying is either grubby or dirty, but I do think a lot of it is rather amateurish and there has been a mushrooming growth in lobbying across all sectors: the public sector, the private sector, the nebulous third sector. Really I just want to know why, in your view, so much of it is just so bad and is just so low-grade.

  Mr Granatt: One reason is that people do not understand how parliament or government works. They have a view they get from watching television and reading newspapers which is a very surface view. They believe that certain things work and certain things do not and that is basically it. If people knew more about what happened, if there was more guidance offered by government and parliament on the best way of making approaches, that would be helpful.

  Mr Bingle: I think it is a number of things including quality control by the public affairs companies themselves. I am not sure 10 years on there has been a dramatic improvement in the quality of people employed in public affairs companies and that is an issue both for the companies and for their clients. It is for clients to be more demanding of what they expect from their consultants. There are too many clients who pay fees and do not get an awful lot back in terms of monitoring. They could read The Times in the morning and get as good information. Ultimately it is about people like me being very tough in terms of who we recruit and the quality of people. It is for the client, if you were approached by a public affairs consultant who was hopeless, to ring up his boss and say he is hopeless.

  Q453  Mr Walker: What responsibility do you, as individuals and leaders of your profession, bear for improving its profile both within the House of Commons and more generally outside the House of Commons.

  Mr Bingle: I used an example in an article a while back. When the Press Council was in difficulty it was replaced by the Press Complaints Commission and they appointed Lord McGregor, and Mark Bolland, as its director. One of the issues for the industry is to have somebody talk on its behalf who is a skilled communicator, who actually can get across what we do and be proud of our industry and that would encourage a higher quality of person coming into it. At the same time, it is then down to us to be very, very tough and if people are hopeless to get rid of them.

  Mr Granatt: Another point to add to what Peter said is that we do offer you evidence and the fact we are prepared to stand up by the standards we espouse.

  Q454  Mr Walker: I am going to ask you a question regarding your relationship with the Speaker. Do you think your decision to resign that account has enhanced your professional reputation and that of your organisation?

  Mr Granatt: I will let other people be the judge of that. I have taken no view on it. I have to tell you it is not something that I wished to happen. It is not something I would have calculated to happen. If it had never happened, I would be a happier man.

  Q455  Mr Walker: You did say earlier on in your evidence session that your speciality was crisis management but actually you resigning turned a crisis into a disaster potentially. I am not meaning to have a go at you but this is a legitimate question. If I was running a large plc, I might think that Mike Granatt took a principled decision to resign that account but my God I would not want him doing that for me. You might become rather toxic out there in the private sector because you could be seen as fairly high risk.

  Mr Granatt: I am sure that is a possibility.

  Q456  Mr Walker: Would you make the same decision again?

  Mr Granatt: Under the same circumstances, yes, I would have to.

  Q457  Mr Walker: How many accounts have you resigned in your professional career as a lobbyist?

  Mr Granatt: One.

  Q458  Mr Walker: It is not something you are going to make a habit of doing.

  Mr Granatt: No.

  Q459  Mr Walker: Do you think you and your organisation did enough due diligence before accepting that role?

  Mr Granatt: At the time I certainly thought we did. The one mistake I made was believing that the standards and behaviour I enjoyed from colleagues in Whitehall for 25 years I would also find elsewhere.

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