Kekst and Brunswick Sharing PR Duties for Enron
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Holmes Report

Kekst and Brunswick Sharing PR Duties for Enron

Two of the nation’s most respected strategic communications firms—Kekst & Company and The Brunswick Group—have been working with troubled energy trading company Enron to assist with crisis communications.

Paul Holmes

NEW YORK, December 3—Two of the nation’s most respected strategic communications firms—Kekst & Company and The Brunswick Group—have been working with troubled energy trading company Enron to assist with crisis communications. Meanwhile, west coast investor relations and crisis management specialist Sitrick & Company has been counseling Enron suitor Dynergy.
Enron was a Wall Street darling until August of this year, when chief executive Jeffrey Skilling abruptly resigned. Two months later, the company announced a huge third-quarter write down and a $1.2 billion reduction in shareholder equity due to losses from off-balance sheet partnerships. The next day, The Wall Street Journal reported that some Enron executives had made millions from those deals, and the Securities & Exchange Commission subsequently launched an informal probe that resulted in the departure of chief financial officer Andy Fastow.
As the company’s financial position worsened, rival Dynergy emerged as a potential savior, announcing a merger agreement in early November. That agreement fell apart on Wednesday, and Enron is now likely to file for Chapter 11 bankruptcy protection.
Kekst has handled numerous special projects for Enron over the years, starting with a crisis involving the company’s Puerto Rican water operations, but sources say the New York firm—which specializes in crises and financial transactions—was not called in for the announcement of Skilling’s departure, and didn’t become actively involved with Enron until after the third quarter earnings announcement and the subsequent SEC letter regarding the informal inquiry. It then counseled the company to bring in independent legal counsel and a separate accounting firm to work with the special counsel to satisfy the SEC’s queries.
Brunswick, meanwhile, joined the Enron communications team a little more than a week ago, following the Dynergy-Enron merger announcement. The two firms have been working together since then, apparently quite amicably.
Neither firm would comment on the work it was doing for Enron. Brunswick’s Mike Buckley declined to comment, while Kekst’s Larry Rand said nothing beyond paying tribute to Enron’s corporate public relations team at Enron, led by vice president of corporate communications Mark Palmer. “The PR department at Enron has done an outstanding job in the face of what is probably the most dramatic meltdown in corporate history,” says Rand. “These are tremendous professionals who are laboring mightily to deal with unprecedented events.”
In addition to the Enron business, Brunswick has picked up a handful of new assignments in recent weeks, including public affairs work for ProComp, an alliance of companies dedicated to encouraging greater competition in the technology sector (and less domination by Microsoft), and work for both parties in the Royal Caribbean Cruises and P&O Princess Cruises merger.
The primary focus of Brunswick’s work for ProComp (The Project to Promote Competition in the Digital Age) will be litigation support. David Shapiro, a partner in the Washington, D.C., office, worked with ProComp during the Microsoft antitrust trial, when he was at Bork & Associates and ProComp was working with Bork and its sister company in the Weber Shandwick Worldwide organization Powell Tate. There was a lull in activity after the trial ended, but things are likely to heat up again over the next couple of months.
The Department of Justice settled with Microsoft, and several state attorneys general joined that settlement, but nine state AGs are continuing to fight for what Shapiro calls a “more meaningful remedy” and a judge will rule on whether the settlement is in the public interest after a 60-day period for comment.
The win is clearly a big one for Brunswick’s fledgling D.C. operation. “Washington has been open for three months and it's already profitable,” says Shapiro. “We expect it to get busier because the domestic client base is growing rapidly and so much of what happens in Europe is effected by regulators and litigators in D.C.”
Other new business includes work for medical journal publisher Mosby, which was used as a return address for an anthrax-laden letter that was found in Switzerland this week; Akers Laboratories, an emerging biosciences company that may be going public; Multex, a competitor to First Call; Converium, a major reinsurance company that retained Brunswick to assist with a cross-border listing; and Wolsey, a major building supply concern.
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