By Gregory Palast for The Observer/Guardian UK
The story of Bank of Scotland’s painful association with American TV evangelist Pat Robertson can easily be told as a hilarious tale of misjudgement, a public relations disaster that provided huge entertainment for all.
Episode one The bank feels that ‘to remain competitive and one of the UK’s leading banks, it must seek innovative ways of expanding its market’ – a phrase used in a letter to unhappy customers in March.
Episode two Talks start between the bank and Robertson Financial Services, the company controlled by the ultra-right wing preacher, aimed at setting up a telephone banking operation in the US.
Episode three After the deal is announced, a number of British groups that had previously been happy to deal with Bank of Scotland say they would rather not be associated with an organisation that is teaming up with a bigot who has variously attacked homosexuals, feminists, Democrats, Muslims and Hindus. (Robertson’s take on feminism gives a flavour: he called it a ‘socialist anti-family political movement that encourages women to leave their husbands, kill their children, practise witchcraft, destroy capitalism and become lesbians’.)
Episode four The bank maintains – again in the March letter to disgruntled customers – that ‘Dr Robertson is well known for his personal views, particularly on abortion and homosexuality. Those views, as with the personal views held by all the people with whom we do business, do not determine the basis of their business relationship with the bank’.
Episode five Pressure builds. Local councils, students’ groups and many other organisations and individuals threaten to take their business away from the bank. The TUC threatens to end an affinity card deal. The bank, however, still thinks it can hold the line, and soldiers on.
Episode six Robertson publicly attacks Europe’s tolerance, says that ‘in Scotland you can’t believe how strong the homosexuals are’, and warns that the Scots ‘could fall right back to the darkness very easily’.
Episode seven Last Monday, Bank of Scotland finally realises that its association with Robertson could be catastrophic. Chief executive Peter Burt flies to Boston to tell Robertson that the joint venture is off.
Conclusion An embarrassing episode for the bank, but not many dead. People within the bank cringe that their employer could have associated itself with so dangerous a character as Robertson. Everyone outside has a chuckle.
The bank says it will look for another US partner. Robertson is free to carry on practising his bizarre and extreme brand of evangelism.
It’s a neat way to sum up the story. But in truth it’s too neat. It conceals several crucial facts – facts that may mean that both the venerable bank and the outspoken Robertson find it less easy than they might wish to shrug the whole thing off.
Point one: The idea that Bank of Scotland and Robertson’s businesses were only now trying to strike up an acquaintance is nonsense. According to Neil Volder, president of Robertson Financial Services, the Scottish bank had for some time provided funding for a retirement community and nursing home complex run by Robertson.
Point two: Although the tone of the bank’s March letter to clients was emollient, its initial reaction to criticism of the deal was far more aggressive. Indeed, to help with the public relations crisis, it employed one Jack Irvine, not noted for his liberal views.
In a column in the Scottish edition of the Mirror last year, Irvine caricatured the argument for lowering the age of consent for homosexual sex to 16: ‘If you’re old enough to get married, you’re old enough for a slobbering old queer to have his evil way with you.’
Point three: Bank of Scotland showed an initial reluctance to admit that Robertson had been appointed to chair the holding company of its US retail banking offshoot. The bank protested that it was ‘not public information’ before The Observer revealed the appointment two weeks ago.
It’s true Robertson had no position at all on the board of the holding company’s operating subsidiary. So why the reluctance to boast publicly of Robertson’s assuming the chair of the holding company? That may tie in with…
Point four: Robertson’s Christian Coalition – classed as an educational organisation, thus qualifying for tax breaks – has been charged by the Federal Election Commission with making ‘prohibited in-kind contributions’ to the Republicans by printing campaign literature and organising a mailshot. Given this challenge – one of several – to the legality of the Christian Coalition’s activities, it is scarcely surprising that the bank played down its links with Robertson in the US.
The bank, after all, is still seeking a charter from the US Federal Reserve to allow its proposed venture to start operations. And the Fed, as effective guarantor of any bank it authorises, is always scrupulous in ensuring that those running any bank are squeaky clean.
Having Robertson, a man who could find himself in deep trouble as a result of the investigations of his Christian Coalition, as director of the bank’s company could, to say the least, be unhelpful in the bank’s dealings with the Fed.
Point five: The importance of the Christian Coalition in American politics should not be underestimated. It has the virtual power of veto over the Republicans’ choice of presidential candidate. If the coalition does lose its tax-free status, there could be a significant impact on next year’s presidential primaries.
Point six: Bank of Scotland, Robertson and everyone else involved in the doomed deal consistently denied that the bank had chosen Robertson because of his huge following of religious zealots.
And clearly, it would be shocking for a non-profitmaking organisation (headed by one P Robertson) to allow its mailing list to be used to promote a banking operation (whose parent was chaired by the same P Robertson and whose 25 per cent investor was Robertson Financial Services).
Nor would Bank of Scotland want to be seen teaming up with Robertson because his rantings about gays, Scotland and whatever go out to 1 million viewers of the Christian Broadcast Network (CBN).
As The Observer reported on 23 May, two former top executives of Robertson companies have said that CBN and coalition lists were indeed used to try to build up a Robertson business, Kalo-Vita, which collapsed in 1993.
The allegations are strenuously denied by the CBN and the coalition. But whatever the truth about those events, concern over the distinction between Robertson’s ‘religious’ work and his businesses being blurred means any would-be partner can kiss goodbye to the hope that the evangelist’s followers could be tapped to launch any new product.
Only three weeks ago, Neil Volder, president of Robertson Financial, blithely declared that, in talks with Bank of Scotland, he had reminded the bank that ‘Dr Robertson’s large television following’ could do no harm to the proposed new banking venture’s chances of recruiting customers.
But remember – any suggestion that Robertson’s non-profitmaking organisations are being exploited to support his businesses threatens the tax-free status of those non-profit bodies. With investigations by the Internal Revenue Service and the Federal Election Commission into aspects of Robertson’s affairs now under way and out in the open, Volder’s utterances sound a trifle reckless.
This weekend, Elliot Mincberg, a lawyer with the civil liberties group People for the American Way, said it would make a complaint to the IRS against the Christian Coalition based on The Observer’s investigations into Robertson’s activities.
The alleged use of lists from the coalition to promote Robertson’s businesses would be ‘clearly improper’, he said.
So where does all this leave Bank of Scotland? Clearly, those at the top look pretty foolish. They were foolish not to carry out sufficient research into Robertson in the first place. They were foolish to adopt an abrasive, combative approach towards any media that challenged the wisdom of the Robertson tie-up. And they were foolish to continue to believe – until six days ago – that they could weather the storm.
The fact that Bank of Scotland eventually capitulated was applauded by all and sundry last week.
But look at one interpretation of the story: the bank didn’t mind doing a deal with a bigot as long as he confined his attacks to homosexuals, feminists, various religious groups and anyone whose politics were dangerously liberal by his extremist standards. Only when he had a go at Scotland did the bank really get upset.
Bank of Scotland comes out of the episode looking battered. Its chief executive, Peter Burt will not, say the bank’s spin doctors, resign; the ethos of collective responsibility is too strong, they say.
Nevertheless, a promising upward run in the bank’s share price in the New Year was reversed as the potential threat to the business posed by the Robertson connection became manifest. (West Lothian Council threatened to move its £250m a year account; members of the Scottish Parliament were restive when they found that its account was with the bank that apparently loved a bigot.)
And by wasting so much time in the fruitless pursuit of a deal with Robertson, Bank of Scotland has put back any attempt it might now make to start afresh on a US venture.
The bank has indicated that it will try to find a different partner with which to set up a direct banking operation in the US. Maybe. If it does, you can be certain of one thing: Bank of Scotland will choose its new partner more carefully than it did the last.
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Gregory Palast’s column “Inside Corporate America” appears fortnightly in the
Observer’s Business section. Nominated Business Writer of the Year (UK Press
Association – 2000), Investigative Story of the Year (Industrial. Society – 1999), Financial Times David Thomas Prize (1998).