Reputation laundering

Reputation laundering occurs when a person or an organization conceals unethical, corrupt, or criminal behavior or other forms of controversy by performing highly visible positive actions with the intent to improve their reputation and obscure their history.

Reputation laundering can include gestures such as donating to charities, sponsoring sports teams, or joining prominent associations.

Origin of the term

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One of the first uses of the phrase "reputation laundering" was in 1996, in the book The United Nations and Transnational Organized Crime, which defined it as "the process of acquiring respectability in a new environment".[1][2]

An early use of the phrase in mass media was in 2010, in a Guardian article headlined "PR firms make London world capital of reputation laundering", a report which focused on the use of public relations (PR) firms by heads of state (including Saudi Arabia, Rwanda, Kazakhstan, and Sri Lanka) to obscure human rights abuses and corruption.[3]

The phrase was in common use by 2016 when it was used by Transparency International in their report "Paradise Lost: Ending the UK's role as a safe haven for corrupt individuals, their allies and assets". In that report, they defined reputation laundering as "the process of concealing the corrupt actions, past or present, of an individual, government or corporate entity, and presenting their character and behaviour in a positive light."[4]

The phrase "reputation laundering" is a play on the older phrase "money laundering".

Activities associated with reputation laundering

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Reputation laundering includes activities such as:[4][5]

  • Using public relations companies
  • Developing political connections to influence governments
  • Hiring law firms to combat allegations related to past unethical conduct
  • Donating to cultural, charitable, and educational organizations
  • Sending children to elite schools
  • Investing in prestigious sports teams
  • Sponsoring major sporting or entertainment events
  • Buying highly-visible luxury real estate
  • Hiring consultants to enhance their image
  • Establishing partnerships with museums or universities

Public relations firms

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Reputation laundering activities are sometimes delegated to professional public relations (PR) firms. Techniques employed by PR firms on behalf of the purportedly corrupt or criminal customers include fake social media accounts, blogs by fake personalities, or partisan op-eds.[6]

The British public relations firm Bell Pottinger is noted for using PR techniques for reputation laundering, supporting clients such as Alexander Lukashenko, Bahrain, and the Pinochet Foundation.[7]

Public relations firms Havas, Publicis, and Qorvis were hired by Saudi Arabia to perform reputation laundering after 9/11 and the Assassination of Jamal Khashoggi.[5]

Notable examples

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Sports

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Main article: Sportswashing

Involvement in professional sports, by sponsorship or ownership, is a prominent activity used for reputation laundering. Examples include the creation of Formula 1 car races in Qatar and Saudi Arabia,[8] ownership of Chelsea F.C. by Roman Abramovich,[9] and ownership of the Newcastle United football club by Saudi Arabian investors.[10]

Charity

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Reputation laundering often involves charitable donations from the persons attempting to improve their reputation. One study found that Russian oligarchs had donated between $372 million and $435 million to charitable institutions in the United States.[11] Charities and non-profits that received funds, according to a database compiled by David Szakonyi and Casey Michel include MIT, Brandeis University, Mayo Clinic, John F. Kennedy Center for the Performing Arts, New York University, Brookings Institution, Harvard University, and the New York Museum of Modern Art.[11][12]

The Sackler family is particularly notable for its charitable donations that aim to repair their reputation, which was heavily damaged by their role in the opioid crisis. Since 2009, the family has donated over £170m to art institutions in the United Kingdom.[13] The family's philanthropy has been characterized as "reputation laundering" from profits acquired from the selling of opiates.[14][15] The Sackler family name, as used in institutions which the family have donated to, saw increased scrutiny in the late 2010s over the family's association with OxyContin. David Crow, writing in the Financial Times, described the family name as "tainted" (cf. Tainted donors).[16][17] In March 2019, the National Portrait Gallery and the Tate galleries announced that they would not accept further donations from the family. This came after the American photographer Nan Goldin threatened to withdraw a planned retrospective of her work in the National Portrait Gallery if the gallery accepted a £1 million donation from a Sackler fund.[18][19] In June 2019, NYU Langone Medical Center announced they will no longer be accepting donations from the Sacklers, and have since changed the name of the Sackler Institute of Graduate Biomedical Sciences to the Vilcek Institute of Graduate Biomedical Sciences.[20] Later in 2019, the American Museum of Natural History, and the Solomon R. Guggenheim Museum and Metropolitan Museum of Art in New York, each announced they will not accept future donations from any Sacklers that were involved in Purdue Pharma.[21] In 2022, the British Museum announced that it would rename the Raymond and Beverly Sackler Rooms and the Raymond and Beverly Sackler Wing, as part of "development of the new masterplan", and that it "made this decision together through collaborative discussions" with the Sackler Foundation.[22] Prior to the collapse of his cryptocurrency exchange, FTX, entrepreneur Sam Bankman-Fried did not have known wrong doing to launder, but is alleged to have used (among other means) "a value system of utilitarian idealism ... not orientated toward money"[23]—for example promising to give away 99 percent of his fortune[24]—which led to investors letting "down their due diligence guard."[23]

Collaborating with media

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Alex Shephard, writing in the New Republic, asserts that general Mark Milley—chairman of the Joint Chiefs of Staff—engaged in self-beneficial reputation laundering when he acted as a primary source for news media, providing media with inside accounts of events in the Trump White House.[25] Milley's intention, according to some analysts, was to prompt major media outlets to rehabilitate his reputation (tainted by the association with the Trump administration) and in exchange, Milley provided insider information to the media.[26]

Arwa Mahdawi, columnist for The Guardian, characterized Rudy Giuliani's appearance on The Masked Singer as reputation laundering.[27]

Russian Oligarchs

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The United Kingdom government generated a report in 2020, analyzing the activities of Russian oligarchs in the United Kingdom.[28] The report states that the oligarchs had been "extending patronage and building influence across a wide sphere of the British establishment" and had employed public relations firms that were "willing beneficiaries, contributing to a ‘reputation laundering' process".[29]

A notable example of Russian oligarchs participating in reputation laundering is Viatcheslav Moshe Kantor, who donated £9 million to King Edward VII's Hospital, a facility used by the UK royal family and patronized by the queen. The donation came under scrutiny after Kantor was placed under sanctions during the 2022 invasion of Ukraine, and the hospital removed Kantor's name from a wing of the hospital.[30]

Angolese kleptocrats

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According to the National Endowment for Democracy, kleptocrats from former Portuguese colony Angola used Portugal as a base to engage in reputation laundering. In particular, Isabel dos Santos, the billionaire daughter of Angola’s president, was alleged to engage in reputation laundering. Examples of reputation laundering by Angolese aristocrats included participation in high-profile social events, and promoting philanthropic endeavors.[5]

Louvre Abu Dhabi

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According to the National Endowment for Democracy, aristocrats of United Arab Emirates engaged in reputation laundering when they established a partnership with France's Louvre museum, and created the Louvre Abu Dhabi.[5]

Saudi Arabia

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Main article: Qorvis § Saudi_Arabia

The public relations firm Qorvis was hired by Saudi Arabia to improve its image in the wake of the September 11 attacks, paying the company $14.7 million between March and September 2002.[31] Qorvis engaged in a PR frenzy that publicized the "9/11 Commission finding that there was 'no evidence that the Saudi government as an institution or senior Saudi officials individually funded Al Qaeda, while omitting the report's conclusion that 'Saudi Arabia has been a problematic ally in combating Islamic extremism.'"[32][33] Petruzzello told The Washington Post that the work was not about "lobbying" but "educating" the public and policy makers.[34]

Qorvis also had lead role in shaping media coverage of the widely criticized Saudi-led attack on Yemen of 2015. This included the creation of the website operationrenewalofhope.com and helping Saudi officials gain access to US media.[35] One example of the latter is a Newsweek article in which the Saudi foreign minister claims that, far from "supporting violent extremism", his country has actually shown "leadership in combating terrorism".[36]

Qorvis has also been employed by Saudi Arabia to repair its image and reputation following the Kingdom's assassination of journalist Jamal Khashoggi, receiving $18.8 million from October 2018 through July 2019[37] and signing three additional contracts with the Kingdom in spring 2019.[38]

See also

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Footnotes

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  1. ^ The United Nations and Transnational Organized Crime, p. 166, Phil Williams, Ernesto Ugo Savona, Psychology Press, 1996.
  2. ^ "Google Books Ngram Viewer". books.google.com. Retrieved 2022-11-11.
  3. ^ "PR firms make London world capital of reputation laundering". the Guardian. 2010-08-03. Retrieved 2022-11-11.
  4. ^ a b "Paradise Lost: Ending the UK's Role as a Safe Haven for Corrupt Individuals, Their Allies and Assets". Transparency International UK. Retrieved 2022-11-11.
  5. ^ a b c d "Waking up to Reputation Laundering as a Mechanism for Transnational Kleptocracy" Melissa Aten, John Glenn (editors) March 2022, National Endowment for Democracy, https://www.ned.org/wp-content/uploads/2022/03/Global-Insights-Waking-up-to-Reputation-Laundering-as-a-Mechanism-for-Transnational-Kleptocracy.pdf
  6. ^ Media and Mass Atrocity: The Rwanda Genocide and Beyond Allan Thompson, p 509, 2019, McGill-Queen's Press. "So-called 'black' public relations (PR) firms have also played an important role as hired proxies for state-sponsored trolling attacks, notably Bahrain. These firms offer 'reputation laundering' services, which take many forms, including..."
  7. ^ "'Reputation laundering' is lucrative business for London PR firms". the Guardian. 2017-09-05. Retrieved 2022-11-11.
  8. ^ "Laundering Reputation: Gulf Countries and 'Sportwashing' - Berkeley Political Review". 2021-12-11. Retrieved 2024-04-22.
  9. ^ "Unravelling of Roman Abramovich era leaves doubts at Chelsea and beyond | Barney Ronay". the Guardian. 2022-03-02. Retrieved 2022-11-24.
  10. ^ "Saudi takeover of Newcastle leaves human rights to fog on the Tyne | David Conn". the Guardian. 2021-10-08. Retrieved 2022-11-29.
  11. ^ a b Michel, Casey (2022-04-01). "How Russia's Oligarchs Laundered Their Reputations". Intelligencer. Retrieved 2023-05-24.
  12. ^ "To sanction Russian oligarchs, the first step is finding their money". NBC News. 2022-03-13. Retrieved 2023-05-24.
  13. ^ O’Hagan, Sean (2022-02-27). "Patrick Radden Keefe on exposing the Sackler family's links to the opioid crisis". The Observer. ISSN 0029-7712. Retrieved 2023-05-24.
  14. ^ "New Yorker Sackler Article". newyorker.com. October 23, 2017. Retrieved October 17, 2018.
  15. ^ "Sackler Blood Money disgraces museums". theguardian.com. February 16, 2018. Retrieved October 17, 2018.
  16. ^ David Crow (September 8, 2018). "What next for the Sacklers? A pharma dynasty under siege". Financial Times. Retrieved February 24, 2019.
  17. ^ David Armstrong (February 21, 2019). "Sackler Embraced Plan to Conceal OxyContin's Strength From Doctors, Sealed Testimony Shows". ProPublica. Retrieved February 27, 2019.
  18. ^ "Tate art galleries will no longer accept donations from the Sackler family". Guardian. March 22, 2019. Retrieved March 22, 2019.
  19. ^ Walters, Joanna. "Nan Goldin threatens London gallery boycott over £1m gift from Sackler fund". The Guardian. Retrieved March 23, 2019.
  20. ^ Youn, Soo. "NYU Langone no longer accepting donations from the Sacklers, the family that owns OxyContin maker Purdue Pharma". ABC News. Retrieved December 19, 2019.
  21. ^ Harris, Elizabeth A. (May 15, 2019). "The Met Will Turn Down Sackler Money Amid Fury Over the Opioid Crisis". The New York Times. Retrieved May 17, 2019.
  22. ^ Cascone, Sarah (25 March 2022). "The British Museum Drops the Sackler Name From Its Galleries, Joining a Growing Flood of Institutions Cutting Ties With the Family". Artnet News. Retrieved 25 March 2022.
  23. ^ a b Helmore, Edward (17 December 2022). "Fraud, cons and Ponzi schemes: did Sam Bankman-Fried use Madoff tactics?". The Guardian. Retrieved 23 January 2023.
  24. ^ Kim, Whizy (22 December 2022). "Sam Bankman-Fried's arrest is the culmination of an epic flameout". Vox. Retrieved 23 January 2023.
  25. ^ Shephard, Alex; Tomasky, Michael; Tomasky, Michael; Grant, Melissa Gira; Grant, Melissa Gira; Shapiro, Walter; Shapiro, Walter; Tannehill, Brynn; Tannehill, Brynn (2021-07-16). "The Generals Won't Save Democracy". The New Republic. ISSN 0028-6583. Retrieved 2023-05-24.
  26. ^ Allsop, Jon. "On Mark Milley, Stephanie Grisham, reputation laundering, and complicity". Columbia Journalism Review. Retrieved 2023-05-24.
  27. ^ Mahdawi, Arwa (2022-02-05). "Lied and need your reputation laundered? Just go on a reality TV show". The Guardian. ISSN 0261-3077. Retrieved 2023-05-24.
  28. ^ "Government response to Intelligence and Security Committee Russia Report". GOV.UK. 2020-07-21. Retrieved 2023-05-24.
  29. ^ Thomas, Daniel (2022-05-04). "British accountants and PR firms told to cut Russia ties". Financial Times. Retrieved 2023-05-24.
  30. ^ "Inquiry Into Oligarch's Charity Which Donated to Royal Hospital". Bloomberg.com. 2022-04-23. Retrieved 2023-05-24.
  31. ^ Gerstein, Josh (December 20, 2004). "P.R. Effort By Saudis Sparks Justice Probe". The New York Sun. Retrieved December 8, 2011.
  32. ^ Kurlantzick, Joshua (May 7, 2007). "Putting Lipstick on a Dictator". Mother Jones. Retrieved August 22, 2007.
  33. ^ Shenon, Philip (December 5, 2002). "Saudis Face New Problem With Publicity". The New York Times. Retrieved December 8, 2011.
  34. ^ Judy Sarasohn (March 21, 2002). "Saudi Arabia a 'Fascinating Client' for Qorvis". The Washington Post.
  35. ^ Fang, Lee (December 1, 2015). "Inside Saudi Arabia's Campaign to Charm American Policymakers and Journalists". The Intercept. Retrieved December 2, 2015.
  36. ^ Abel bin Ahmed al-Dubeir (February 3, 2016). "The Saudis are fighting terrorism, don't believe otherwise". Newsweek. Retrieved February 8, 2016.
  37. ^ Reinhard, Beth; O'Connell, Jonathan; Hamburger, Tom (July 10, 2019). "In the aftermath of Khashoggi's killing, Saudi influence machine whirs on in Washington". The Washington Post. Retrieved July 17, 2019.
  38. ^ Ahmed, Akbar Shahid (October 9, 2019). "Khashoggi's Murder Should Have Made Saudi Arabia A Pariah. 7 Men Made Sure That Didn't Happen". HuffPost. Retrieved October 9, 2019.

References

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  • Empire of Pain, Patrick Radden Keefe, April 13, 2021, Doubleday, ISBN 978-0-385-54568-6
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