Mulroney Wins his Costs

Mulroney Wins his Costs

Public Relations 400: Case Study (honors students only). The client is a former Canadian prime minister who left office with the lowest poll ratings in history. Two years later, he is remembered mostly for his blarney and bluster, and still arouses an almost irrational anger among many Canadians at the mere mention of his name. Now, his political enemies hold power. They have sent a letter to the Swiss government in which the client is accused of a holding a secret bank account filled with the proceeds of a crime - taking multimillion-dollar kickbacks while in office - and the letter has leaked to the press. The client requests help with his public image. Solve.

Were it just an academic exercise, even the bravest student could be excused for ducking this course. But public relations executive Luc Lavoie, 42, says that when he took Brian Mulroney's real-life call for help in the now-infamous Airbus affair, "there was not one second of hesitation" from his bosses in the Ottawa offices of National Public Relations Inc. Go for it, Lavoie was told, and that launched a closely watched, ultimately successful and certainly lucrative 14-month-long public relations and legal campaign to exonerate the former prime minister. The Liberal government apologized to Mulroney last January, agreeing that it had no evidence whatsoever for its allegations. Then-Justice Minister Allan Rock tried to hand off the blame to the RCMP, and the January settlement stated that the Mounties would cover Mulroney's bills. Last week, arbitrator Alan Gold ordered the RCMP to pay invoices from Mulroney totalling $2,006,508 - $587,721 to National alone.

To the layman, that seems like a hefty fee for what Gold detailed only as collecting newspaper clippings and media reports from around the world. But Gold, the former head of Quebec's Superior Court and a man with a sound reputation for fairness, was laudatory in upholding National's entire bill. His eight-page judgment noted that a key Mulroney legal document was a result "of information obtained and services rendered by National." It is that network that made Lavoie's contribution unique. "The visible part of the job was being a spokesman," said the gruff Lavoie, a managing partner at National who charges about $200 an hour. "But 80, maybe 90 per cent of our work was constant monitoring and intelligence gathering from any sources - all of it legal."

Of course Mulroney did not find Lavoie through the Yellow Pages. The Rimouski, Que., native had been a colorful television journalist in Ottawa for 10 years before going to work for the Conservatives in 1986. He became a senior communications adviser to Mulroney a year later. Mulroney admired someone with his own scratch-and-claw instincts, and Lavoie rose to become deputy chief of staff. His sometimes bruising style always provoked its own strong reactions, even within Mulroney's orbit where friends still compete with one another to describe their closeness to the sun. "Brian finds Luc efficient," says one longtime Mulroney friend carefully. The Mulroney connection has paid dividends for Lavoie, too: he was hired by Barrick Gold Corp., of which Mulroney is a director, during the infamous, short-lived Indonesian gold rush. Lavoie may also be the only Mulroney intimate to maintain a friendship with Lucien Bouchard, who has become persona non grata with the old gang since his political divorce from Mulroney in 1990.

When the Airbus clouds began gathering, Mulroney hit Lavoie's number on the speed dial. "Brian was not going to appear in the media defending himself," said one Mulroney friend. "He knew he couldn't win that way." Instead, Lavoie and National brought resources that might have strained a legal team. Founded in 1976, the company has over 250 employees across Canada, and claims to be the biggest public relations firm in the country. Its international network with Burson-Marstellar allowed it to monitor what was being reported in newspapers around the globe - crucial to Mulroney's argument that the damage to his name was worldwide. "We were fast, very, very fast to react to the government's moves," said Lavoie last week in an interview with Maclean's. "We always knew what was coming in the newspapers the next day and the lawyers considered this key to their work." He cited a May, 1996, interview with RCMP commissioner Philip Murray where the Mountie vowed to use any tactics to delay the case. "This had legal implications," said Lavoie.

National designated an employee to constantly monitor the Internet, watching for the first electronic editions of the newspapers to come on-line in the early morning hours. "The Ottawa Citizen used to come on at 12:30 a.m. in those days, for example, so we'd see it and have several hours for the lawyers to prepare a response to anything that was coming," said Lavoie. When journalists would call him to get Mulroney's reaction to any scoops they were about to publish, Lavoie could "pick up the phone and tell the lawyers." In fact, Mulroney's team always had good insight into what the government side was up to. One of his lawyers was Roger Tassé, a former deputy minister at the justice department who was able to analyze and predict his former department's moves. And Lavoie used his own Ottawa network to suss out information. "All the experiences of my life came together on this case," he said last week. "I was an Ottawa guy for 21 years, I understand the way of thinking. And people would call me up, outraged about what was happening to Mulroney, saying, 'I think you should know this and that.' "

Lavoie will not confirm or deny responsibility for two key stories that he believes helped soften public opinion towards Mulroney. One was the publication in The Financial Post of the meagre funds in the Swiss bank account in question, showing a few hundred dollars where Ottawa's scenario forecast millions. The other scoop went to the Sun papers, explaining that the mysterious account named "Devon" did not belong to Mulroney. He does, however, angrily deny the widespread theory that the Mulroney side itself leaked the justice department's infamous letter in order to launch the former prime minister's $50-million libel suit, settled out of court last January. "That's sick," says Lavoie. "His only bloody obsession was that it never become public."

Friends say Mulroney remains convinced the affair was orchestrated by Prime Minister Jean Chrétien and senior aide Eddie Goldenberg for political ends. "There's an analysis that says Chrétien's popularity was based on the simple fact that he was not Mulroney," said one Mulroney associate. "How long can you keep that up? After two years of breaking promises and adopting the old Tory platform, they needed a way to remind people that Chrétien was not Mulroney." Lavoie, too, has his suspicions about the political roots of the letter. "I was deputy chief of staff. He was PM. We pretty well know how the system works. We know it as well as the people who are there. And these things do not happen because a sergeant in the RCMP decides to nail Brian Mulroney on his own. Anybody that knows Ottawa from the inside knows that is impossible."

Mulroney heard news of the Gold judgment while in New York City to get a medal from the Foreign Affairs Association. "I'm pleased that the page has been turned; now maybe we can all get on with our lives," he said to reporters before heading off to dinner at the home of American chat show star Kathie Lee Gifford, a close friend of Mila Mulroney. The only submitted bill Gold rejected was Mulroney's appeal for $38,744 to cover some accounting costs. Even some friends shook their heads ruefully at that request: typical Mulroney, pushing his luck, with a knack for putting his worst face forward. "All I can think of to explain it," said one friend, "is that he figured the judge couldn't give him it all, so the old negotiator in him put it in there so Gold would have something to take out." Mulroney may need help in public relations. But he needs no help in Bargaining 101.

Maclean's October 20, 1997