WASHINGTON: WPP Group confirmed that Mark Penn will continue to be CEO of Burson-Marsteller despite a perceived conflict of interest that arose because of his meeting with officials from Colombia, a former client of the firm, and his work for Sen. Hillary Clinton's presidential campaign.
Howard Paster, EVP of WPP, told PRWeek that Penn "did the client a disservice because of the publicity" surrounding his meeting at the Colombian embassy in DC to discuss Burson's work on the US-Colombia Free Trade Agreement, which Clinton opposes.
However, senior management retains confidence in Penn.
News of the meeting between Penn and Colombian officials, first reported by The Wall Street Journal, created a chain of events, including the AFL-CIO calling for Penn to step down as chief strategist for the Clinton campaign, and then his subsequent resignation. The article also resulted in Colombia's termination of Burson as its PR agency.
However, in an internal Burson memo obtained by the Journal, the firm noted that Penn would continue to advise the campaign. In addition, the WPP-owned Penn Schoen & Berland Associates, of which Penn is the president, continues to serve as Clinton's polling firm.
Colombia retained Burson last year under a $300,000 contract to help promote passage of the trade agreement. But, a day after the Journal report and an apology by Penn, President Alvaro Uribe said that the Colombian government believed Penn's declaration that the meeting was an "error in judgment" showed a "lack of respect to Colombians."
"If he'd not gone to the embassy, there would have been an appropriate fire wall between him and the client," Paster said. "I think that the error he made was with respect to both the client and the campaign, frankly, because the client got negative publicity - which you never want to do for a client - and it caused the campaign another political problem."
When asked if Sir Martin Sorrell, WPP's CEO, was upset by Penn's action, Paster responded: "I think it's fair to say that we're all upset about it, and that includes Mark and WPP. This is not something anyone likes."
Paster called Penn's visit with Colombian officials a routine courtesy call that did not delve into specifics related to the passage of the trade agreement. The "error" Penn had referred to, Paster said, was not the actual meeting, but putting the client in the situation the meeting caused.
A Burson representative, speaking on background, added that Penn never said he would recuse himself from working with other clients of the agency (besides Microsoft and Clinton). He added that Penn did not discuss the trade agreement issue at the meeting with Colombia, but simply met with officials as a longtime personal associate of the ambassador, and to ask whether or not the client was happy with the level of service the firm was providing.
Although WPP expects the story to continue to "run its course" in the media, including follow-on articles in weekly news magazines, Paster reiterated that Burson has done well under Penn's leadership.
"Burson is at a good place right now," he said. "It had a strong '07, an excellent first quarter this year, it's growing in all regions, has got a lot of good people, and we expect it will survive the storm."
Opponents of Clinton previously claimed that Penn's dual role with her campaign and Burson - which has represented companies criticized by the New York senator, such as Blackwater and Countrywide Financial - pointed to hypocrisy within the Clinton campaign, which in turn argued that Burson's work was unrelated to her.
All along, Penn has denied any conflict of interest. In an interview with PRWeek several weeks ago, Penn said Burson clients did not view his work for Clinton negatively.
"If I and the people [at] Penn and Schoen are in the middle of big events, I think they just see it as useful additional skills that don't have any impact in any way," he said.