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	Ethics in a Real World By David Finn

The first time an ethical problem was faced by Ruder Finn was in 1960, two years after our company was formed, when Senator Joseph McCarthy was chairman of the Senate Permanent Subcommittee on Investigation for Communist activities. He was determined to expose communists or communist sympathizers who were working in corporations, government offices, educational institutions and elsewhere. The question asked of individuals who were called before his committee was whether they had ever been a member of the Communist Party or knew anyone who had been or was a member. Many used their constitutional right to plead the Fifth Amendment. It states:

No person shall be held to answer for a
capital, or otherwise infamous crime,
unless on a presentment or indictment
of a grand Jury, except in cases arising
in the land as naval forces, or in
the Militia, when in actual service
in time of War or public danger, nor
shall any person be subject for the same
offence to be twice put in jeopardy of
life or limb, nor shall be compelled
in any criminal case to be a witness
against himself, nor be deprived of
life, liberty, or property, without due
process of law; nor shall private property
be taken for public use without
just compensation.

Pleading the Fifth Amendment

Thus, if one pleaded the Fifth Amendment in response to the question asked by the committee, one would not have to answer any other questions. If one didn’t plead the Fifth Amendment, one would have to answer any and all other questions, including whether one knew anyone who might have been a communist. In order to protect their friends as well as themselves, many liberals who were called to testify pleaded the Fifth Amendment. Mc- Carthy was convinced that witnesses would only use that constitutional right if they had been communists themselves, and he called them “Fifth Amendment communists.” He believed all “Fifth Amendment communists” should be fired from their jobs, and he was so powerful that many of them were.

One of those who pleaded the Fifth Amendment was a public relations executive working for a Denver hospital. He was fired, and soon after he was looking for a job in New York. He happened to apply for a position at Ruder Finn. We were impressed with his experience and hired him. Shortly after, a reporter who worked for The New York Times also pleaded the Fifth Amendment and he was fired. He applied for a job at Ruder Finn, and we hired him as well.

It didn’t take long for word to get around that if some public relations executive was called before McCarthy’s Senate Committee, pleaded the Fifth Amendment and was fired from his job, the place to look into for a new position was Ruder Finn. When another person lost his job because he pleaded the Fifth Amendment he came to Ruder Finn to see if there was an opening.

A Brilliant Solution

Now we had a problem. If we hired a third Fifth Amendment person, or a fourth or a fifth, Senator McCarthy would consider our company to be one of his targets. Although, as far we knew, none of us had been involved with the Communist Party, we might still want to use our constitutional right and plead the Fifth Amendment on principle, which would then get the firm into trouble.

On the other hand, if we had an opening on our staff, how could we not hire someone who we thought was an experienced public relations person but had used his constitutional right not to answer questions from a Congressional Committee? It was a difficult problem, and we didn’t know what the right solution would be.

Since we were confused we thought we needed some wise counsel. As it happened, I knew Dr. Ernest Johnson, a professor of philosophy at Columbia University who was also the chairman of the Ethics Committee of the National Council of Churches. I decided to call him and ask if he would be willing to help us think through what to do with our very disturbing ethical problem. He said he would be delight to do so and invited us to meet with him at his office at Columbia. Shortly after, Bill Ruder and I, together with our executive vice president, Paul Zucker, went to his office to seek his advice.

Professor Johnson explained to us at the outset that ethical problems might not involve judgments in which there was a clear right and wrong. The most difficult ethical problems, he said, were those in which there was a conflict between two rights. When he heard our story, he believed that it was that kind of conflict we were facing. One right judgment would be to respect the privilege of someone who used the Fifth Amendment not to answer questions, and the other right judgment would be not to hire someone who could get our company into trouble. But he said there are rarely only two choices. There might be another approach that we might consider, and we ought to consider what other options we had.

To our surprise, after talking for a while we did come up with another option. What if we used our resources to try to help this third person who pleaded the Fifth Amendment get a job at another public relations firm? That would respect his constitutional right and not endanger our own firm. We had never thought of that possibility, but when it occurred to us, we considered it a brilliant solution to what appeared to be an unsolvable problem.

Negative Option

We then called another public relations firm and recommended this new candidate. To our delight the firm hired him. And we continued to follow that policy — calling other firms whenever someone applied for a job who had pleaded the Fifth Amendment. 

I might add a sidebar — actually, two sidebars. One was how the New England lawyer, Joseph Welch, who was representing the U.S. Army, which was then under investigation by the McCarthy committee, dealt with the Senator. Many of us were glued to the television in that historic moment when Welch said to the Senator in reply to one of his comments, “Sir, have you no decency?” McCarthy, who had defied everybody, including President Eisenhower, finally was beaten, and his reign of terror came to an end. 

The other sidebar had to do with McCarthy’s two young assistants, who had done much of the investigation for McCarthy’s attacks. One was Roy Cohn, a lawyer, and the other was G. David Schine, who later became an executive in his family hotel business after the McCarthy era came to an end. Some time later, David Schine and Bill Ruder were both members of the Young Presidents Organization, and the two of them talked together about the possibility of Ruder Finn working for the Schine hotels. When Bill mentioned this to me, I cringed. Bill thought working for the hotels had nothing to do with politics and suggested that the three of us meet. But when we got together, I couldn’t resist mentioning his relationship with McCarthy. I felt that David Schine had been so closely identified with those painful investigations that our working for him would be a problem. I had the nerve of saying to him that if he would publicly disassociate himself with the Senator and his committee, I would feel more comfortable working with him. His answer was “Senator McCarthy was one of the finest people I have ever known, and nothing will persuade me to say otherwise.” That was the end of our conversation, and the end of the possibility of working for the hotels. After that, Bill and I agreed that if either us had a negative feeling about working for a prospective client — or any other issue that might come up — the other would respect that feeling and agree that we wouldn’t do it. I called it our “negative option.”

The Ethics Committee

As time went on, other ethical problems arose, and we began talking to several theologians and ethicists about how we should make responsible decisions. One of them was Father LaFarge, a prominent Catholic theologian who had addressed public ethical issues. Others were my uncle, Dr. Louis Finkelstein, who had created the Conference of Science, Philosophy and Religion; a third was Professor Seymour Siegel, who taught ethics at the Jewish Theological Seminary; and a fourth was Prakash Sethi, a professor at Baruch College who was engaged in unique studies of business ethics. We invited them and others to talk to our staff about how to deal with ethical issues. 

We eventually created an Ethics Committee in which an outside ethicist would always be present, and we met regularly to address different problems. We always found that those discussions helped us come to what we believed were responsible judgments.

Philip Morris

One of our most painful problems had to do with Philip Morris, which we started working for in the 1960s. Our early projects had to do primarily with the company’s public service activities, especially its support of the arts. The first exhibition the company sponsored was called “Op and Pop Art,” and that was one of our assignments. Philip Morris eventually became one of the largest corporate supporters of the arts, and we were proud to be involved in its many outstanding activities.

But as time went on, the health problem of smoking became a major public relations issue, and that began to worry some of us. We had a meeting of our Ethics Committee, and Dr. Louis Finkelstein was present as our outside adviser. We discussed the many positive contributions the Philip Morris Company was making to society and how proud we were to be working on those projects. Dr. Finkelstein said that he could well understand why we were pleased with those assignments, but he thought we should make it our policy not to become involved in the health issue.

We felt that was sound advice. We tried our best to follow it, and for a long time we were not involved. It was considered to be a legal more than a public relations issue. Whenever a new study was reported that showed a relationship between cigarette smoking and lung cancer, the industry’s response was that there was no evidence of a cause-and-effect relationship. Statistical reports may have showed correlations between people who smoked cigarettes and those who suffered from lung cancer, but there was never any proof that it was smoking that caused the cancer. So whenever a new report came out, the official response was that smoking cigarettes was not a health problem. Cigarette industry sales and profits continued to rise.

Then, at one time I drafted an article for the Saturday Review entitled “Business and its Critics.” Its theme was that corporations should give more thoughtful, sensitive and responsible responses when there were criticisms of their policies or practices in the media. This should apply to food companies that faced overweight problems, to automobile companies that faced accident problems, to smokestack companies that faced pollution problems, to chemicals companies that faced agricultural problems, to nuclear power plants that faced potential disaster problems, and to cigarette companies that faced lung cancer problems. My argument was that corporations should not just dismiss these criticisms as unfounded or unproven. Means should be found to convince the public that business cared as much about health and safety as anyone else. In the course of the article I mentioned that the standard tobacco industry response to new health reports was unconvincing, and I suggested that a more thoughtful statement would be more appropriate. I believed that the industry should show respect for the new evidence and state that it would search for a responsible policy that recognized the seriousness of the problem revealed by the different studies (which, many years later, Philip Morris did develop when it created an advertising campaign urging people to stop smoking).

Since Philip Morris was our client, I sent a draft of the article to the public relations director for his information. He suggested that we get together for breakfast and talk about it. I thought it was going to be a thoughtful discussion but was somewhat taken aback when he asked me if I honestly thought smoking cigarettes was a health problem. I was surprised by the question since the answer seemed so obvious, but I replied that every doctor I knew believed smoking cigarettes was harmful. “I wasn’t asking about doctors you know,” he said. “I was asking what you thought.” Again I was surprised, but I answered that the Surgeon General thought smoking was related to lung cancer. He repeated, “I wasn’t asking about the Surgeon General, I was asking about you.” I answered that if every doctor I knew thought smoking could cause lung cancer, and the Surgeon General thought so as well, then I had to believe that smoking cigarettes was a health problem. That was the answer he was looking for. His response was that if I thought smoking cigarettes was a health problem I shouldn’t be working for Philip Morris. I asked him if everyone who worked for Philip Morris had to believe that smoking cigarettes was not a health problem. Absolutely, he answered. No one could work for the company who thought otherwise. Then he suggested that I eliminate the issue of smoking in my article. And if I didn’t, he said, I would have to suffer the consequences.

Suffering the Consequences

That was a threat I didn’t appreciate. But now I faced the ethical problem of writing what I believed to be correct or not writing what my client didn’t want me to say. I knew there was a danger in the former but a dishonesty in the latter. So I chose the former, and my article was published as I had written it. From then on I was barred from all meetings with Phillip Morris, and I could never be involved in any way with that client again, including work we did for its sponsorship of the arts, which I greatly admired. Our company did continue to work for Philip Morris for many years, and most of our assignments had to do with its sponsorship of the arts and sports, and a variety of community services. But it was clear that nobody could ever be critical of smoking as a health issue. And being involved with that client was altogether out of bounds for me.

We had another problem with that client when we were working on an exhibition at the Museum of Modern Art sponsored by Philip Morris. One of the artists whose work was included in the exhibition was upset that it was sponsored by a cigarette company. He organized a public opposition about the sponsorship, including a large sign placed across the street from the museum. Apparently one of the members of our staff who had worked for Ruder Finn for over thirty years knew about this in advance but never told the client. She was considered to be sympathetic to the artist’s complaint — which, in fact, she wasn’t — and our client considered her irresponsible. They were so angry they demanded we fire her. We felt we couldn’t do that, but to avoid any difficulty we did agree to remove her from our Arts and Communications Department. Instead, we assigned her to work on the arts collections in our many offices around the world — which she did for many years until she died in 2005.

An especially difficult ethical problem we had that resulted in a sad ending had to do with work we were doing for Greek tourism. I loved visiting Greece and was thrilled when Ruder Finn was retained to handle its travel public relations. Then, one day, three colonels took control of the government and established a dictatorship. There were stories in the media every day about changes that were being made by the colonels. It didn’t affect the work we were doing, since the Parthenon was still there, Olympia and Delphi were still there, the Greek islands were still there, and tourists could still enjoy visiting all those wonderful places. But we didn’t know if we should continue working for a government that had been taken over by a dictatorship. Our Ethics Committee met to discuss the problem, and there were different points of view among us. Some thought that tourism had nothing to do with the change of government, and that there was no reason why we shouldn’t continue working for our client. Others thought we shouldn’t work for a dictatorship. We finally decided that our ethics advisor, who at the time was Professor Seymour Siegal, and I should go to Greece — at Ruder Finn’s expense — and decide what we should do after we saw what was actually happening.

So the two of us went to Athens to meet with the colonel who was now in charge of tourism. The night before our appointment we spoke to some of our friends about the new government. They didn’t want to talk on the telephone, but we took walks together and they told us that conditions were terrible. Some well-known people who criticized the government had been put in prison. Others had left the country. Fear was everywhere.

The next day, when we went to meet the colonel, we noticed that several of the daily newspapers had large white spaces in which articles had been censored, and we were convinced we should resign. We told the colonel that tourism promotion would now be related to the new government policies, and we were the wrong firm to work for the country. He was surprised and said he liked the work we were doing, and he wanted us to continue. He felt that tourism was going to be very important to the new government. But he also wanted to give us an additional assignment. It had to do with The New York Times and the “lies” it was writing about the new Greek government. He understood that an advertising campaign for Greek tourism in The New York Times would make a difference in its editorial policy. He wanted us to develop such a campaign and make sure that articles about the new government would be more sympathetic. We explained as best we could that this was not a realistic idea, and told him that we had to resign. We left and wrote a letter confirming our resignation.

Legal Action

There was another ethical issue we faced that led to legal actions. One of our departments was doing some nonprofit work for the Natural Resources Defense Council, and we organized a press conference to announce the discovery that the use of aerosols were slowly but critically destroying the ozone layer. Responsible scientists believed that aerosols should be made illegal. Unknown to the members of our staff who were working on that press conference, the head of a major aerosol company talked to another one of our top executives about challenging that upcoming announcement from the Natural Resources Defense Council.

He said that scientists he knew believed that the accusations were “ridiculous.” Our executive didn’t know that another department of our firm was organizing that press conference, but he told the head of the aerosol company that if it was true that responsible scientists disagreed with the criticism, he should arrange for them to make their point of view public. The aerosol company never hired Ruder Finn to represent its point of view, but when its president discovered that the press conference for NRDS took place in our office, he accused us of being unethical, and sued us for what he described as a conflict of interest. The fact that we never worked for his company didn’t seem to matter.

He sued us in Municipal Court and lost the case. He sued us in New York State Court and again lost the case. He sued us in Federal Court and once again lost the case. The legal expenses for us were high, but we were glad to have won the case in all three courts. Soon after, aerosols were declared illegal.

Swiss Banks and The Holocaust

It’s amazing how accusations of wrongdoing can create problems for innocent people, as Henrik Ibsen so effectively portrayed in his classic play The Enemy of the People. When the aerosol company president accused us of a conflict of interest, we received a telephone call from the chairman of the Ethics Committee of the Public Relations Society of America to tell us that Bill Ruder and I were going to be investigated for a violation of its Ethics Code. As it happened, neither of us had been active in the PRSA, and both of us had resigned. So no investigations took place. Later I was invited to speak to a PRSA conference in Boston together with Edward Bernays, but when he found that I was going to be there he withdrew because of Ruder Finn’s supposed violation of ethical principles on the aerosol issue. He thought we had worked for both the company and its critics at the same time. I couldn’t help thinking of the fairy tale of the glass house that was beautiful but breakable. Because we were the one firm that gave such a high priority to ethical considerations, we were the ones who were most vulnerable to accusations of being unethical.

Another ethical problem we faced had to do with work we were doing for the Swiss government. We had been retained to represent the government in relation to negotiation with the World Jewish Congress about reparations for missing bank accounts deposited by Jewish families during World War II. Our assignment was to help the position of the Swiss government to be respected by media in the U.S. Some members of our staff were upset that we were representing the Swiss government on that issue. They felt that the Swiss government should pay whatever the World Jewish Congress thought would be appropriate. They believed it was unethical for us to be opposed to the World Jewish Congress.

As it happened, the president of the World Jewish Congress was a friend of mine, and he was pleased that Ruder Finn had been retained to represent the Swiss government. He thought we would be an effective intermediary between the two sides. When I told him that some of our colleagues were upset, he volunteered to come to our office and explain how pleased he was that we were involved. Our entire New York office attended that meeting, and everyone was impressed by what he had to say. The issue was finally resolved with the payment by the Swiss government of more than 1.25 billion dollars, which the World Jewish Congress distributed to the families that had been affected.

I might add that one of the people we met during the Senate hearings about Swiss government payments to Jewish refugees was Emmanuel Tchividjian. He attended those senate hearings in Washington, D.C. He grew up in Switzerland and was sympathetic to the survivors and heirs. He was delighted to know that we were respected by both the Swiss government and the Jewish community. Subsequently he became a member of our staff and is now Ruder Finn’s Ethical Officer. Today he is one of the rare executives in a public relations firm who is a member of the Ethics and Compliance Officer Association.

Over the years we have had many other issues to discuss at out Ethics Committee meetings. There have been times when we decided not to work for potential clients because we didn’t agree with their policies or positions. There have been times when we had to deal with problems involving employees who had done something we thought was unethical. There have been times when we had to establish new policies to guide us in future ethical issues. I have always been present in all these many years at the meetings of our Ethics Committee. I feel that this is a management responsibility. And I hope that when I’m not around, other top managers of our company will take my place. I consider this to be an essential part of our responsibility, our tradition and our future.