Barclays and Libor: Swim, Dammit, Swim Scandal: What Every Business Needs to Learn From Penn State and the Freeh Report Adjusting Your Content Strategy: for the Penguin Update 5 Ways Insurers Can Position Themselves to Win Under the ACA BPA: Emotions Trump Science at Every Turn Mike Koehler on Foreign Corrupt Practices Act Reform www.levick.com/insights

1. EDITION 1
Weekly July 27, 2012
Barclays and Libor:
Swim, Dammit, Swim
Scandal: What Every Business
Needs to Learn From Penn State
and the Freeh Report
Adjusting Your Content Strategy:
for the Penguin Update
5 Ways Insurers Can Position
Themselves to Win Under
the ACA
BPA: Emotions Trump Science
at Every Turn
Mike Koehler on Foreign Corrupt
Practices Act Reform

2. Barclays and Libor:
Swim, Dammit, Swim
The thing about a tsunami is that, if you haven’t Of course for American banks, the tsunami
du jour is the Libor-fixing scandal that has
(like homeowners) can file lawsuits. In just
one American city, the Federal Reserve Bank
gotten to a safe place soon enough, there’s already cost Barclays $450 million in fines, of Cleveland has already warned that a big
exposed that British banking giant to an entire percentage of prime adjustable-rate mortgages
not much you can do except watch your own generation of litigation, and forced Chief Ex- and subprime ARMS are tied to the Libor
extinction roll in from the deep. ecutive Robert Diamond and Chairman Marcus index. In some cases, it may be difficult for
Agius to resign. plaintiffs’ lawyers representing homeowners
to show causation but they’ll certainly try, and
Richard S. Levick, Esq. It’s a little surprising that an event that so
Originally Published on Forbes.com won’t stop trying for years.
fundamentally compromises the global mar-
ketplace has generated widely divergent Can you say “asbestos?” It’s a neat comparison
commentary. There are even suggestions from and a vexing one. The world can (and does)
high-authority sources that the scandal has live without asbestos. It cannot live without
been significantly overstated by vengeful me- banks.
dia and self-interested politicians. On the other
There is, as has been pointed out, every reason
side, equally informed commentators warn
to anticipate that U.S. financial institutions
that, if attempts to manipulate Libor were suc-
are also in for their share of severe regulatory
cessful, it could be “the biggest securities fraud
fines, incessant litigation, and further political
in history, affecting investors and borrowers
calumniation. Earlier this year, it was reported
around the world.”
that traders at Citigroup and UBS tried to
Since Libor involves literally trillions in global manipulate Libor rates for the yen. UBS has
instruments, an incalculable number of people reportedly already cut a deal in various inves-

3. Weekly
“ There’s an uptick in inquiries about account transfers
to mutuals and ethical banks...Once customers
realized that manipulation may have artificially
inflated the price of credit across the whole economy,
maybe for years, that’s a bread and butter issue.”
in order to fix the prime rate. That the Libor “After we then found out the Libor market was,
investigations stretch back to 2007 only exacer- to use Paul Tucker’s word, a ‘cesspit,’ you were
bates the communications challenge because it bound to get the whole issue of banking reform
Tupungato/shutterstock.com additionally underscores the fact that the prob- reopened,” adds Mason.
With over 300 years of history and expertise in banking, Barclays operates in over 50 countries and lem was systemic, not aberrational. And, when
employs 140,000 people. We’re reminded of a similar uptick in the U.S.
Robert Diamond agrees to forego $31 million in
a few years ago when community banks saw
stock bonuses, it too fuels public ire by begging
tigations in exchange for leniency on criminal After all, we’ve reached something of a break- some increase in their business as a result of
the question, why was the man responsible for
charges. Bank of America was subpoenaed ing point as stakeholders simply cannot toler- the banking scandals. But the more pressing is-
this bank about to get so much money but for
last year. JPMorgan Chase, HSBC, and others ate more of the same betrayal they’ve endured sue on both sides of the Pond is the prospect of
the inconvenient fact that Barclays got caught?
sat on the Libor panel during the period since the subprime disaster. In that sense, even new legislation that could dwarf Dodd-Frank.
under investigation and may also face a much less threatening crisis than Libor could Absent an extraordinary communications cam- In the U.S., the banks particularly need to take
unpleasant questions. become the straw that breaks the camel’s paign, there are long-term risks looming for the ongoing revival of interest in the Glass-
proverbial back. As financial institutions wait the entire financial industry. In the UK, “the Steagall Act (the law limiting the securities
A realistic assessment is that the industry’s
their turn to enter the Libor line-up, they must big unanswered question is whether we will activities of commercial banks, passed in 1933
actual exposure, civil and criminal – as well
therefore face an extraordinary communi- now see consumers begin to desert Britain’s and repealed in 1999) very seriously. L
as the looming harm to global markets – lies
cations challenge: how do we talk to people main street banks,” says Paul Mason, econom-
Richard Levick, Esq., President and CEO of LEVICK, repre-
somewhere between “this is just a witch hunt”
who’ve given us every chance to talk to them ics editor of the BBC’s Newsnight. “There’s an sents countries and companies in the highest-stakes global
and “this is an unprecedented disaster.” At the
in the past but who, at this belated point in uptick in inquiries about account transfers to communications matters — from the Wall Street crisis
same time, the impact of the tsunami will be and the Gulf oil spill to Guantanamo Bay and the Catholic
time, are no longer inclined to listen? mutuals and ethical banks...Once customers
measured at least as much in terms of public Church.
realized that manipulation may have artificial-
response and political reaction as in direct Right now Americans are experiencing much
ly inflated the price of credit across the whole
economic fallout. less of a media feeding frenzy over Libor than
economy, maybe for years, that’s a bread and
the Brits, but that might change once they real-
butter issue.
ize that this scandal is almost tantamount to
some bank manipulating the Federal Reserve

4. Scandal:
What Every Business
Needs To Learn From
Penn State And The
Freeh Report
This week, former FBI Director Louis Freeh confirmed
what most people following the Jerry Sandusky scandal
have believed since the story was first reported; that the
most senior Penn State officials knew about the coach’s
reprehensible acts and did nothing to protect the children
he was abusing for more than a decade.
Richard S. Levick, Esq.
Originally Published on Forbes.com

5. Weekly
This week, former FBI Director Louis Freeh Among their many greater sins, they failed to all, a few community members posting on an Companies and organizations know how to
confirmed what most people following the understand the transparent nature of this digi- internal social network don’t carry the weight deal with three of the four quadrants outlined
Jerry Sandusky scandal have believed since tal age—that institutional privacy has vanished of 60 Minutes or the New York Times. The con- above. High-risk, high-authority stories need
the story was first reported; that the most and everything is now discoverable. As a re- tent was certainly damaging, but it was being to be dealt with aggressively and immediately.
senior Penn State officials knew about the sult, the rest of us have been provided a salient circulated by folks who seemingly lacked the Low-risk, low-authority stories are best left
coach’s reprehensible acts and did nothing lesson in how high-risk, low-authority chatter influence to be widely believed. alone. And low-risk, high-authority stories may
to protect the children he was abusing for ought not to be ignored by anyone responsible require some form of response, but nothing on
The problem, however, is that the message
more than a decade. for protecting a brand or high-profile reputa- the level of a national news conference.
board postings were, by definition, the breed
tion (not to mention children at risk).
The only conclusion one can draw is that of high-risk, low-authority conversations that It’s when we come to the high-risk, low-author-
former president Graham Spanier, former When 22-year-old reporter Sara Ganim broke can cause real problems in the social media ity stories that we see companies and organiza-
athletic director Tim Curley, and the late head the Sandusky story open, she did so by follow- era. All potential news falls into one of four tions stumble. Penn State is not alone. It is the
coach Joe Paterno believed that whispers about ing up on conversations she stumbled across categories. Let’s stick with the Penn State warning shot across the bow. Your risks may
Sandusky’s gruesome acts were safely con- on Penn State’s own online message boards— example and add a few hypothetical stories to not be pedophilia, but what enterprise risks
fined within community walls. As long as they conversations that Penn State officials either illustrate the point: are people talking about now that provide you
kept the lid tightly shut, the accusations would were not monitoring or disregarded as not early warning?
• High-risk/high-authority: The Wall Street
never spring forth from this particular credible enough to ever cross the thinning
Journal publishes front-page accusations Time and again, we’ve seen children’s product
Pandora’s Box. line between rumor and “real news.” After
that Jerry Sandusky has been abusing companies fail to take what’s written on the
children for years. This is the moment the Mommy blogs seriously. We’ve seen food pro-
story goes viral. ducers ignore what the plaintiffs’ bar is writing
on its blogs as it searches for the next big class
• Low-risk/high-authority: The Wall Street
action case. And we’ve seen single customer
Journal publishes a back-page report that
service snafus detailed on YouTube evolve into
freshman applications at Penn State are
national scandals before the purveyor of said
down slightly from the previous year.
service even knows what hit it. And it’s not just
• High-risk/low-authority: Community mem- bloggers and social media. It’s all sources. How
bers post to a message board that Jerry does your company stack up in search engines
Sandusky may be abusing children. This when you type in risk terms, not just the name
is the moment that institutions should be of your company or brand? When you whistle
on notice. Monitor aggressively and advise past Penn State, don’t whistle too loudly.
decision makers of the rumors and that,
The advent of social media has provided even
critically, they are no longer operating in a
the most low-authority sources with a mega-
vacuum.
phone that helps their messages reach the
• Low-risk/low-authority: A student posts to mainstream media, plaintiffs’ attorneys, regu-
a message board that the dining hall food lators, analysts, and others who can do lasting
Richard Paul Kane/shutterstock.com
gave him athlete’s foot.

6. Weekly
harm to a brand or reputation. At the same
time, however, it’s most important to note that
meant looking at the social media buzz sur-
rounding Notre Dame, Pitt, and other similar Adjusting Your Content STRATEGY:
social media have also provided companies
and organizations with a crystal ball of sorts—
institutions to see if speculation about football
coaches’ behavior is as rampant across the
for the Penguin Update
a tool by which they can see into the future to NCAA as it was in State College.
Lauren Yontef
identify the issues that may eviscerate their
3. Understand that low-authority sources Originally Published on Bulletproofblog.com
brands in the coming hours, months or years. Annette Shaff/Shutterstock.com
matter: A recent Agenda article authored by
Of course, that’s only true if they take the time
Amanda Gerut details just how much weight
to study the tea leaves. With the release of Google Penguin, it’s way, you don’t have to rely solely on Google
some forward-thinking companies lend to
likely time to take a good hard look at your rankings for traffic. Be sure to create meaning-
social media chatter. Coca-Cola, for instance,
content strategy. Content has always been ful headlines, as most social users today won’t
How can other companies and uses social media to “head off thorny issues.”
king, but unique content that offers value read past the first 70 characters. Also be sure
organizations best ensure that Proctor & Gamble CEO Robert McDonald is
and substance in order to earn Penguin- to focus on quality and the value your readers
they stay on top of high-risk, personally involved in the monitoring process,
proof links is now absolutely essential. garner from your insights.
low-authority issues? saying “I personally see the comments about
the P&G brand. This allows for real-time reac- How can organizations ensure that the Pen- And third, watch your keyword use. While
tion to what’s going on in the marketplace, guin update doesn’t devalue their content keywords are great, the latest Google update
1. Institutionalize a social media moni-
because we know that if something happens under the new paradigm? means that over-use will scream spam. While
toring structure: The task is greater than
in a blog and you don’t react immediately—or, we’ve all be trained that we should use the
simply having interns or assistants hand over First, assess your current content situation.
worse, you don’t know about it—it could spin same keyword combinations throughout our
an aggregation of Google News items each Check Google Webmaster Central to see if you
out of control by the time you get involved.” I content so that we’ll rank well for a particu-
morning. Companies need to make use of the have a message from Penguin. If your content
couldn’t have said it better myself. lar phrase, you will now be penalized and
myriad analytical tools available to know what was impacted by the update, chances are if you
removed from the rankings all together if
is being said about their brands online, who is Once we step back from the negligence carried will have been notified. Check your Analytics
keyword density is too high. It’s now best to
saying it, and—perhaps most important—who out by PSU officials, we begin to see how they to assess potential Penguin damage. A simple
write content that is closely associated with
and how many people are listening. could believe such inaction was even possible. 90-day traffic report should tell you if you lost
your business while not limiting yourself to
They made the fundamental mistake of believ- visitors. Also, be sure to check your keyword
2. Include risk and competitive analyses: keyword containing topics. Instead, embrace
ing that low-authority sources lack the power referrer report, as well as manually check
Companies can’t just scour the Web for men- all relevant concepts, even if they don’t offer
to take down an empire. Don’t make the same the rankings on some of your top keywords.
tions of their brands or leadership; they need many keyword opportunities. And remem-
mistake. The emperor’s clothes are as invisible Finally, be sure to use link tools to see your link
to anticipate their greatest brand risks and ber, never write your content first and then
as they’ve ever been—even if the garment in profile and ensure that “spammy” or unnatural
include related risk terms in their sweeps sprinkle in your keywords at the end. Do your
question is a navy blue football uniform. L links aren’t hurting your rankings.
as well—whether they be “product recall,” research ahead of time and naturally incorpo-
“bribery,” or “white collar.” When worrisome Richard Levick, Esq., President and CEO of LEVICK, repre- Second, make your content shareable. Chances rate any keywords as you write. L
sents countries and companies in the highest-stakes global
chatter is detected, they also need to perform are that the content you write will end up on a
communications matters — from the Wall Street crisis Lauren Yontef is a Social and Digital Media Account
competitive analyses that tell them if the prob- social network. So why not write about con- Supervisor at Levick and a contributing author to
and the Gulf oil spill to Guantanamo Bay and the Catholic
lem is theirs alone or an industry-wide trend. Church. cepts in a manner that will gain popularity on Bulletproof Blog™.
To return to the PSU example, this would have social media and social networking sites? This

7. 5 Ways
It’s not every day that an industry has as many as 46 million
new customers delivered to its doorstep. But when the U.S.
Supreme Court voted 5-4 to uphold the Affordable Care
Act (ACA) and the controversial individual mandate last
week, that’s precisely what happened for health insurance
Insurers Can Position Themselves companies across the country.
Richard S. Levick, Esq.
To Win Under The ACA Originally Published on Forbes.com
The law has new hurdles to clear in The influx of consumers is also problematic for
Congress and the November election results the industry. With more high-risk patients on
could change the dynamic yet again—but the rolls, insurers will need to offset increased
the machinery of government is nonetheless costs by aggressively pursuing young, predomi-
lurching toward implementation as the nantly healthy consumers who would not en-
American public grows more accepting of ter the market but for the individual mandate.
the new healthcare reality. Tens of millions If they don’t do so effectively, premiums will
of Americans who previously chose to forgo rise even as the exchanges introduce unprec-
health insurance will soon seek coverage. edented levels of competition.
Let the battle for their dollars begin.
You don’t need an advanced business degree to
That contest will be predominantly fought in know what that scenario will mean. It is now
the 50 state-run Health Insurance Exchanges incumbent on private insurance carriers to
(HIX) that the ACA establishes to provide indi- modify their marketing and communications
viduals and small businesses with affordable strategies to navigate these new challenges.
coverage options from the industry’s private Insurers can no longer simply focus on large
carriers. The vast majority of U.S. states were HR departments and other traditional custom-
waiting on the decision before passing legisla- er funnels. They must reach a generation of
tion to establish their exchanges. But with the American youth not entirely convinced of the
SCOTUS decision, most will begin propping up value proposition.
their exchanges by 2014 rather than allow the
feds to step in and do it for them (a few ideo-
logical stragglers notwithstanding).

8. Weekly
5
3. Understand that “young people” is not Insurers must therefore be keenly sensitive
Here are five strategic imperatives the will one audience. to how their brands look viewed through 50
separate prisms and either adjust their policy
help private carriers carve out a significant It’s not enough to define this new audience as
“young people.” Insurance companies need
terms or market the competitive advantages of
slice of this still skeptical pie. to dig deeper and build brand identities that
their coverage to address these varying local
priorities.
cater to the separate market segments under
the “young people” umbrella. Whose brand 5. Excel at customer service.
1. Understand that the individual mandate demographic is, of course, a digital animal. will be known for the policy that is tailored to
Most of us who have had health insurance
is anything but mandatory. That means insurance carriers must now begin the young, single customer yet to start a fam-
for years still don’t fully understand every
a new race to be found and chosen online. ily? Whose brand will be known for the policy
There is a sense among industry insiders that nuance of our policies. From co-insurance to
that is tailored to small business employees?
many young people will opt to pay the modest Which companies will dominate search en- deductible rates, to the medical definition of
Whose brand will be associated with policies
monetary penalty set forth by the individual gine optimization (SEO) and marketing (SEM) an “experimental procedure,” today’s first-time
designed for 30-somethings with kids in tow or
mandate, rather than premiums for policies for the terms used to research their coverage customers will be all the more perplexed by
on the way?
they don’t think they need. The ACA imple- options? Which companies will make effec- the restrictions in effect and the options on the
ments a maximum yearly penalty of $695 for tive use of blogs and social media to enhance Establishing connections between the brand table. They will have a myriad of questions
those who don’t obtain health care coverage, awareness of and affinity for their offerings? and these microtargets will go a long way and concerns.
which could look pretty attractive to potential Most important, which companies will gener- toward defining a policy as best in class. Here,
Customer service will therefore be paramount
customers in lieu of policies they don’t believe ate the emotionally engaging video content the well-known brands have a head start be-
to hold on to an especially fickle youth demo-
they will use. that helps consumers immediately understand cause they are already viewed by many youth
graphic and transform these buyers into life-
that the risk of not being covered is too high? buyers as a safety sell. These companies can
As such, insurers cannot just articulate cover- long brand loyalists. Full transparency must
continue to leverage this trust and familiarity
age details or the pricing advantages of their Two decades ago, the “Harry and Louise” be a priority to ensure that customers under-
as they have in the past.
policies. They must also show that it’s too great television campaign blended information and stand their coverage limits. For the healthcare
a risk to decline coverage. Carriers need to a healthy dose of fear to effectively kill health- industry, Sy Sims’ maxim, that “an educated
4. Localize outreach to 50 different
discuss the importance of preventative care; care reform in the Clinton era. Today, the same customer is our best customer,” is definitive.
exchanges.
how spending a little on routine doctors’ visits approach can be taken—with the opposite end
Many young people will rely solely on the Thanks to the Roberts court, an elusive market
can save your life; and the monumental costs goal in mind—via YouTube and other venues
exchanges that will be set up in each state for segment long coveted by insurers is within
young people will incur if they contract a seri- that young people populate. When they emo-
comparative policy shopping. The devil will reach—but only for those companies that
ous illness or simply break an ankle. tionally connect to the benefits and risks of
be in the proverbial details as each state will speak to the needs of young consumers, and do
not being covered, they will get it. Action fol-
present coverage options in different ways. so in a language that educates, motivates, and
2. Emote online. lows understanding.
Some will highlight deductibles over yearly inspires them to make the right choices. L
Under the ACA, young health insurance con-
premiums. Others will focus more on coverage Richard Levick, Esq., President and CEO of LEVICK, repre-
sumers are now able to rely on their parents
details versus price. sents countries and companies in the highest-stakes global
for coverage until they are 26—but they will
communications matters — from the Wall Street crisis
rely on the web thereafter. The 27-35 year-old and the Gulf oil spill to Guantanamo Bay and the Catholic
Church.

9. BPA:
Emotions Trump Bisphenol A (BPA) is back in the news. This Instead, they respond emotionally, taking steps
Science at Every Turn
time, it’s the General Mills brand Progresso to limit risks, no matter how insignificant they
coming under fire for using the chemical might be.
as an acid-resistant sealant in the lining
That’s undoubtedly why Campbell’s Soup made
of its metal soup cans. Despite a mountain
the decision to go BPA-free earlier this year
of scientific evidence that BPA is harmless
Bisphenol A (BPA) is back in the news. This time, it’s the in the amounts found in food packaging,
and countless other brands of canned foods
have previously done the same. It’s certainly
General Mills brand Progresso coming under fire for using the more than a few Progresso customers are
why Beef Products Inc. had to shut down two-
demanding the brand discontinue its use o
chemical as an acid-resistant sealant in the lining of its metal f BPA and find other alternatives to
thirds of its plants after parents campaigned
against the use of ammoniated “pink slime” in
soup cans. Despite a mountain of scientific evidence that BPA preserve its products and maintain
school lunch hamburgers – even though the
nutritional quality.
is harmless in the amounts found in food packaging, more fine-textured beef had had doubtless prevent-
On Progresso’s Facebook page– which is ed thousands of cases of foodborne illness.
than a few Progresso customers are demanding the brand 213,000 “likes” strong – and via a consumer
Consumer emotion is also why Progresso
discontinue its use of BPA and find other alternatives petition circulated being circulated online, con-
probably will have no choice but to follow
sumers are voicing frustration with the brand
to preserve its products and maintain nutritional quality. in increasing numbers. They are concerned
suit. Fear – now jet-fueled by the Internet –
represents one of the most powerful motiva-
about sensational reports that BPA can leak
tors in the marketplace. When fear attaches
Gene Grabowski into water and food and cause a host of serious
itself to a brand – rightly or wrongly – a com-
health problems.
pany’s best course is to do is whatever it takes
It doesn’t really matter that the science doesn’t to assuage anxiety and demonstrate that con-
actually support a ban on BPA. When it comes sumers come first. L
to the safety of the food they put on their
Gene Grabowski is Executive Vice President at Levick Strate-
tables, American families don’t pay much at- gic Communications, the nation’s top crisis communications
tention to what the guys in white lab coats say. firm. He is also a contributing author to Bulletproof Blog.
Connect with him @crisisguru.

10. Weekly
Mike Koehler
Foreign Corrupt Practices Act Reform
Mike Koehler, J.D., Assistant Professor of non-binding Department of Justice guidance.
Business Law at Butler University, discusses Additionally, he stresses that the FCPA needs
the Foreign Corrupt Practices Act (FCPA). Mr. some limited structural reforms and outlines
Koehler believes the FCPA needs to receive his personal suggestions to enhance the FCPA.
VISIT