P&G's Foray Into Reporter's Phone Records   

Weeks after the Great News Leak Probe at Proctor & Gamble Co., the corporate giant and other involved parties remain on cleanup duty, trying to repair relations with the media.

As the story wound into its fifth week in mid-September, it became clear that the company, as well as Cincinnati Bell Telephone, Inc. and local law enforcement, never anticipated the firestorm caused by the investigation, which P&G and police say did not produce enough evidence to bring any charges.

The story broke Monday, August 12, when TheWall Street Journal reported, in a front-page story, that P&G had recruited Cincinnati police to investigate a news leak from the company to Journal reporter Alecia Swasy. P&G maintains the leaker broke a little-used Ohio statute that prohibits employees from disclosing confidential information to outsiders. Police got a grand jury to subpoena phone records from Cincinnati Bell, which police then searched for calls from two local area codes to Swasy's Pittsburgh office and home.

The story was picked up by scores of other media organizations – from The New York Times to Time to Electronic Media . Most dailies continued coverage for several days, some for weeks. At mid-September, local media were still following the story.

P&G launched a counterattack just days after the initial Journal piece, sending Corporate Counsel James Johnson, Vice President of Public Affairs Robert Wehling and Director of Public Relations Charlotte Otto to meet with editorial boards and reporters.

Their task: Convince the media that the company was not trying to quash First Amendment or privacy rights, but simply hoping to identify a lawbreaker.

"We knew there was the possibility that the investigation, should it become public, could create publicity that would be concerning," Wehling says. "[But] we had no choice. We had to do this. We had an obligation to the shareholders."

Three weeks into the mess, P&G Chairman Edwin L. Artzt apologized to employees and the public for the company's "error in judgment."

The apology won't be enough for some members of the Fourth Estate, media and public relations experts say.

"I think the press is going to clobber P&G for years because of this," says Dean Rotbart, editor of TJFR Business News Reporter newsletter and a former reporter for The Wall Street Journal who covered P&G. "Journalists will now tend to group P&G with Exxon and other corporate villains."

"From a public relations standpoint," adds a prominent P.R. chief from another Cincinnati company, "it was an absolutely Bozo thing to do."

In the aftermath, local and national P.R. officials predict the case will become a textbook example of how not to handle public relations. Among the blunders they cite:

• P&G decided not to issue a news release or call a news conference. It also declined to make Chairman Artzt available for interviews. By voting against full and immediate disclosure, the company let the story dribble out in bits and pieces. As a result, it remained news for far longer than P&G thought possible.

• Cincinnati Bell likewise declined to be forthcoming in the early days of the story, saying only that it had complied with the grand jury subpoena to turn over phone records. Only after the Journal reported, in error, that Bell had to search 35 million long-distance calls to find the information police wanted did Bell act. Four days into the story, Bell began telling reporters it turned over only "very, very few" records. But by that time Bell customers were already convinced the phone company had participated in a massive invasion of their privacy.

• Cincinnati police assigned a P&G part-time security consultant to its investigation of the leak. When P&G disclosed, a week into the story, that Police Investigator Gary Armstrong had been moonlighting at one of its research facilities since 1977, it raised additional concerns about abuse of corporate power. By then, the company had already been criticized for asking police to investigate what was essentially an internal company problem.

• Investigator Armstrong declined to comment for several days, leaving significant questions unanswered.

The reticent P.R. posture of P&G added an ironic twist to the story. The company had been making great progress in turning around its old "no comment" image under Chairman Artzt. A one-time journalism student, Artzt had been extraordinarily accessible for a P&G chief. Since taking the job in January 1990, he has talked with reporters in at least two news conferences; invited them to a major analysts' meeting; sat for several full-length one-on-one interviews; and granted "phoners" with P&G beat reporters to comment on company announcements.

That its ire was directed at reporter Swasy was especially ironic. She had developed special access to Artzt – to the extent that he returned her phone calls, even to her home.

With that and other significant relationships damaged, P&G now faces arduous repair work, says James K. Gentry, director of the business journalism program and associate professor at the University of Missouri at Columbia.

"It was a boneheaded move...Rebuilding credibility is not something a company does by having a press conference. Building credibility is something a company does day by day."

P&G's first test of its progress toward that task is likely to come October 8 at its annual shareholders' meeting. Given Artzt's unavailability in recent weeks, that may be the first chance reporters will have to question the CEO about the investigation – or anything else.