Proctor & Gamble should admit its abuse of power

Published Sept. 6, 1991|Updated Oct. 13, 2005

Obsessed by leaks, a powerful chief executive directs eager-to-please law officers to find out which of his aides have been using the telephone to call reporters. When caught abusing his power by causing the invasion of privacy, the leak-plugger insists he broke no law, belatedly admitting only an "error in judgment."

Sound familiar? In the current case, the chief executive is Edwin L. Artzt of Procter & Gamble; his target was Alecia Swasy of the Wall Street Journal, who dared to make public corporate shake-ups and plans; his plumbers were police and prosecutors of Cincinnati, who subpoenaed the records of 803,000 home and business phones to satisfy a private company's lust to intimidate its critics and conceal its embarrassments.

Artzt, who is paid $1.6-million plus options, has been stonewalling reporters for weeks, issuing written peeps through minions about "no impropriety here." I started calling members of his board of directors; he returned my call.

"I've had a lot of time to think about this while I was fishing," he said, and then came right out with it: "We made an error in judgment. We regret it. We thought we were doing the right thing, and frankly, we were just plain wrong."

That was disarming. "There's no question we had a legal right to seek the assistance of the authorities," he added smoothly, "but we really made an error in pursuing that option, particularly to filing the complaint that led to a search of telephone records.

"We deplore the idea of invading people's privacy and interfering with freedom of the press. I went to journalism school myself."

P&G has to act as if it has no legal liability for having cast suspicion on past and present employees when calling in hip-pocket prosecutors and a city detective who gets a second salary from the company.

The legal counsel who told Artzt he could pull this caper will likely be busy for years fighting and settling lawsuits, costing stockholders plenty.

But what of the ethical dimension? He used the word "wrong" in admitting error _ does this mean P&G understands its ethical lapse?

"This is not an issue of ethics," Artzt insisted. "I do not feel our action was unethical or improper. We shouldn't have done it, that's all; sometimes it isn't easy to see all the implications of a decision."

He still doesn't get it. He sees his misuse of local cops to plug leaks as an error only because it led to bad press, and may cause customers to switch from Crest to a toothpaste made by a company that isn't snooping through their telephone records.

At the meeting of P&G's board next Tuesday, Artzt will present what he calls "the whole story." The thrust of his "whole story" will be that his motive was to counter industrial espionage, to nail unfaithful executives leaking trade secrets to the competition _ the old "national security" argument writ small. It just happened that the snooping centered on people talking about newsworthy embarrassments, not trade secrets, to a woman writing for the Wall Street Journal.

Will the audit committee of P&G's board, which includes such untainted outsiders as David Abshire and Marina v.N. Whitman, swallow management's excuses uncritically?

Let's hope not; they have an obligation to stockholders, employees and consumers to commission an independent report in time for the Oct. 8 annual meeting in the company town _ and not to turn a morally blind eye to a corporate culture that confuses doing stupidly with doing wrong.

Take it from an old Nixon hand: Full disclosure now will save P&G headaches later.

It's not enough to say "our leak hunt backfired, so excuse us"; the maker of Tide and Ivory can only come clean by showing its public, and tomorrow's business leaders, that it understands that abuse of power and invasion of privacy are no mere errors of judgment, regrettably inappropriate _ but are unethical, bad, improper, wrong.

New York Times News Service