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Finding Ammunition and Shields

In early 2004, I received a phone call from a reporter for a major business publication. She wanted to know if I was the Ben Silverman who was donating heavily to Democratic political campaigns. She thought it may make an interesting story considering I wrote a business column, one in which I had been critical of the Bush Administration on more that one occasion, for the right-tilting New York Post.

“No,” I told her quickly, “That’s someone else of the same name. I don’t give to political campaigns.”

OK, so I lied. I do give to political campaigns; I just don’t tell anyone outside of my friends and family just what campaigns I give to. I also don’t tell anyone outside of my circle what organizations I give to. It’s not that I’m an important person; it’s just that I don’t want to open up a can of worms.

I speak to the media on a daily basis, sometimes touching on political issues such as government regulation and the health of the economy. Most of the people reading what I say are everyday Americans looking for some investment intelligence. Do they care about what politicians I support, or do they care about trying to make some money for their retirement? My job is not to be a political pundit, but an investment pundit.

Luckily, aside from one reporter who was looking for a saucy story on a slow day, no one has ever cared what I do with my money. Aubrey McClendon is not so lucky.

McClendon is the co-founder, chairman and chief executive officer of Chesapeake Energy, the third largest independent producer of natural gas in the United States. With a net worth reportedly north of $1.5 billion, he ranked #664 on the list of The World’s Billionaires published by Forbes earlier this month, and #215 on the magazine’s list of The 400 Richest Americans published in September 2006.

With partner Tom Ward, McClendon launched Chesapeake in 1989 and built an empire from scratch. Today the company employs more than 4,900 Americans, and in 2006, Chesapeake churned out $1.9 billion in profits on $7.3 billion of revenues.

People who follow the energy sector know that McClendon is a profit-generating machine. If you invested $10,000 in Chesapeake Energy stock five years ago today, the investment would now be worth more than $43,000. A $10,000 investment made in early 1999, when the stock fell below $1, would now be worth almost $450,000. Even if you were late to the game and only invested in the company two years ago, you would be up 45% on the position. People in Seattle, meanwhile, are just getting to know McClendon – and many don’t like what they’ve heard.

The trouble started last year when McClendon was part of an investment group that purchased the Seattle Supersonics and Seattle Storm, the National Basketball Association and Women’s National Basketball Association teams representing The Emerald City. Locals were wary of the group of investors who hailed from Oklahoma City, and there was a feeling that the teams’ new owners would look to move the franchises to their hometown.

The situation did not improve as the basketball billionaires tried to get tax concessions from the city to build a new arena. The Seattle City Council president was among those who scoffed at the plan. The owners then set their sights on Renton, just down the road from Seattle, but still in Kings County. With the new location outside of the city limits, the owners are looking for concessions from the state and Renton.

Late last month, more controversy emerged when it was revealed that McClendon and Ward (also an investor in the teams) donated more than $1 million to Americans United to Preserve Marriage, an organization opposed to gay marriage headed by one-time presidential candidate Gary Bauer. Seattle area newspapers, radio and television stations have been covering the story closely, and the issue has garnered national attention. Blogs and message boards have helped keep the story in the news.

The Seattle metro area has the second-largest gay and lesbian population in the United States. Last year, the Washington State Supreme Court upheld a ban on same-sex marriages. Microsoft, one of the state’s largest employers, originally supported a bill in favor of same-sex marriage, but a tidal wave of negative press and pressure from employees changed the company stance. With this backdrop, it’s not surprising that McClendon’s support for Americans United to Preserve Marriage has caused controversy to flare.

McClendon and his partners were probably not prepared for the firestorm regarding their political activity. To many people, politics is politics, and business is business. This sentiment has been echoed by some columnists and basketball fans in Seattle, including The Seattle Post-Intelligencer’s Robert L. Jamieson Jr.

“Truth is, when bigwigs in a sports organization use vast sums of personal cash to support any cause, their money can speak volumes about them as individuals,” Jamieson wrote. “But it doesn’t necessarily speak for the organizations they are part of.”

Rand Babcock, a Seattle resident, disagreed in a letter to the editor.

“So we’re supposed to ignore the fact that two of the Sonics owners are rabidly anti-gay and have donated more than $1 million to extremist groups such as Focus on the Family and the Family Research Council. They are entitled to their views, and we shouldn’t consider those views when we review their request for $300 million in tax revenues. Sorry, but no deal,” Babcock wrote.

Doing public relations for the Sonics is probably not an easy task these days. The team is in last place in their division and has the second-worst record in their conference. The team’s leading scorer and lone All-Star was recently injured and will spend the rest of the season watching from the bench. These problems, however, pale in comparison to the arena fight and the public perception that some of the team’s owners support a cause that many disagree with.

Individuals have every right to give money, time or energy to the causes of their choice. When those decisions impact businesses, however, public relations people should be prepared.

For example, when a local publication was preparing a profile on my company, I sat down with our principals and asked them a series of questions regarding their political and charitable involvement.

What political campaigns have you given to? Have you donated money to any political groups or causes? Are you involved with any community issues? Do you attend church? Have you written letters to officials or the media in favor or in opposition to anything? These were some of the questions I asked, and I used the responses to set the reporter on a certain path.

Thankfully, I found no interesting dirt on my bosses, but because the publication was local and aimed at the community, I wanted the reporter to highlight one of our principal’s church involvement. She did so in her article, and it helped when we were recruiting new employees.

McClendon has probably been through worse than what he’s going through now. Still, I wonder why the Sonics PR team is not talking about how McClendon and Ward gave $1 million each to the American Red Cross in the wake of Hurricane Katrina. Or how McClendon has given more than $16 million to his alma mater, Duke University, and more than $2 million to The University of Oklahoma. I would be telling reporters about McClendon and his company being the main financial backers of the non-profit Chesapeake Boathouse, a $3.5 million community boathouse in Oklahoma, and how McClendon is an investor in ProCure Treatment Centers, an Indiana company which is developing a network of cancer treatment centers.

Of course, I probably wouldn’t mention the fact that McClendon has raised the ire of locals around Holland, Laketown and Saugatuck, Michigan, where he’s purchased more than 400 acres of land adjacent to Saugatuck Dunes State Park on Lake Michigan. Locals raised $40 million in an effort to buy the “pristine open dunes, marsh, and natural shoreline,” but McClendon ponied up $43 million last summer to acquire the land. He’s been acquiring additional properties, and though his plans aren’t clear, McClendon does intend to develop the land. I would probably also not mention that the house at the center of the Duke lacrosse scandal is owned by McClendon.

Regardless of what I would and would not mention, it’s important that the PR people dealing with the issue know all of the good and bad things that could be reported when a story like this emerges. The most important thing a PR person can do is to ask and receive an honest response from those who have brought negative attention to the organization.

As it stands, the best PR that McClendon and his partners have received out of this affair has come from Jim Roth, chairman of the Oklahoma Board of County Commissioners, and the first openly gay elected official in the Sooner State. McClendon gave $5,000 to Roth’s campaign last year, and the politician said that the energy executive and another of the Sonics’ co-owners, Clay Bennett, have been fighting on his behalf.

“These two men have publicly and consistently supported me,” Roth wrote in a letter to The Seattle Times, which went unpublished but which he read to The Seattle Post-Intelligencer’s Jamieson, “even pushing back when right-wing attacks have occurred. Their support is unconditional, and has helped improve the overall climate for expanding tolerance here at home.”

As an individual, I’d like to think that Roth came out in support of his friends on his own. As a PR person, however, I’d like to think that someone handling the media duties for the owners came up with the plan to trot Roth out to the media to tell his story. That’s what a good PR person would have done.

This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.

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