How Bell Pottinger, P.R. Firm for Despots and Rogues, Met Its End in South Africa

If an autopsy could have been performed on Bell Pottinger, Britain’s most audacious public relations firm, the cause of death may have been summarized as “acute embarrassment.”

This is ironic because Bell Pottinger always seemed defiantly beyond shame. During its 30 years in the upper echelons of Britain’s spin doctoring game, it sought to polish the image of dictators (Alexander Lukashenko of Belarus), repressive regimes (Bahrain and Egypt, to name two) and celebrities accused of despicable crimes (the Olympic runner Oscar Pistorius after he was charged with murder).

But in early 2016, Bell Pottinger signed a client that ultimately buried it in disgrace. The company worked for the Guptas, three brothers from India who built a sprawling, multibillion-dollar corporate empire in South Africa. Ajay, Tony and Atul Gupta had earned fantastic sums leveraging their friendship with President Jacob G. Zuma. By bullying officials and bending regulations to their will, they secured contracts in fields as varied as armaments, mining and railways. They offered ministerial jobs to politicians of their choosing. The Guptas and Mr. Zuma were so intertwined that critics had taken to referring to the “Zupta regime.”

As the power of the Guptas and their holding company, Oakbay Investments, gained attention, the family wanted the public relations equivalent of a stun grenade — a distraction that would draw attention away from them and onto their many enemies.

So Bell Pottinger was retained, and given an assignment that initially sounded benign enough: grass-roots political activism intended to help poor blacks.

By the following year, Bell Pottinger was embroiled in a national maelstrom. In TV reports, editorials and public rallies, it stood accused of setting off racial tensions through a furtive campaign built on Twitter bots, hate-filled websites and speeches. All were pushing a highly toxic narrative, namely that whites in South Africa had seized resources and wealth while they deprived blacks of education and jobs. The message was popularized with an incendiary phrase, “white monopoly capital.”

Bell Pottinger’s headquarters in London. The public relations firm filed for bankruptcy last September. Credit Andrew Testa for The New York Times

How Bell Pottinger went bankrupt is a tale of corporate skulduggery that seems lifted from “House of Cards,” the P.R. edition. During the Gupta disaster, a vicious boardroom struggle unfolded, one that pitted a co-founder, Tim Bell, against James Henderson, 53, who ran the firm in the years before it went under. Their conflict centered on the perennials of business potboilers, namely power and money.

The story is also an inside look at the current, tormented state of politics in South Africa. Allegations of Gupta-related corruption surfaced gradually over the years, as officials and the media described how this once unknown family was ransacking South Africa and its institutions. President Zuma has since been swept up by investigations into the brothers amid an outcry that he let them hijack the government in a textbook example of “state capture.” With the economy sputtering, Mr. Zuma’s own party has called for his ouster.

The scandal has engulfed the nation. Mr. Zuma is a member of the African National Congress, the party of Nelson Mandela and post-apartheid comity. His alliance with the Guptas, and their exploitation of racial animosity, has underscored just how far the party has wandered from its roots after winning its first election in 1994.

Though the only corporate fatality, Bell Pottinger is just one of the companies tainted by the Guptas. A small coterie of multinationals is now under investigation by South African authorities, including local units of three companies, McKinsey, KPMG and the software giant SAP.

The Guptas’ most devastating legacy is the harm they did to the cause of economic reform. With so many blacks in South Africa mired in poverty, the topic is urgent, but discussion about it has been debased by its association with a notorious and self-serving P.R. campaign.

In the midst of that campaign, racial tensions rose to levels that had not been felt since apartheid. “White monopoly capital,” a phrase that for years had been confined to left-wing academic circles, was suddenly unavoidable. A political group with reported links to the Guptas warned of a coming civil war.

When Bell Pottinger’s role became public, protesters rallied against the company, both in South Africa and outside the firm’s London office. A subsequent investigation by the Public Relations and Communications Association, a trade group in Britain, ended with the ejection of Bell Pottinger.

Mr. Zuma answers questions from South Africa’s Parliament last March about his leadership, including his relationship with the Guptas, three wealthy brothers from India. Credit David Harrison/Agence France-Presse — Getty Images

“In my years of running the P.R.C.A., I have never seen anything worse, never seen anything equal to it,” Francis Ingham, director general of the trade association, said in an interview. “The work was on a completely new scale of awfulness. Bell Pottinger may have set back race relations in South Africa by as much as 10 years.”

Within days of the firm’s removal from the trade association, clients were fleeing. By the end of September, all 250 employees were laid off and Bell Pottinger was finished.

A Unique Client List

London is now home to a cluster of P.R. firms catering to foreign governments, raising worries that the city has become “the global capital of reputation laundering,” as The Evening Standard put it a few years ago. Bell Pottinger established the template of this lucrative niche.

It was largely the brainchild of Tim Bell, who had earned his reputation, along with a knighthood, helping Margaret Thatcher win three elections. He came to fame with the “Labour isn’t working” ads that helped the Conservative Party gain control of Parliament in the 1979 general election. Colleagues actually coined the phrase, and he talked Mrs. Thatcher into adopting it.

“There were many conversations in which she shouted at me and told me I was an idiot,” he recalled. “I just had to stand my ground and say, ‘I know what I’m doing.’”

Now 77, Mr. Bell appears to have stepped directly out of an Evelyn Waugh novel with everything but a smoking jacket. Gray haired with an owlish pair of black glasses, he speaks with jaunty indifference and ingratiating candor, a combination that always made the tsk-tskers who disapproved of his client list sound unworldly and naïve.

With the company co-founder, Piers Pottinger, Mr. Bell conceived a “go anywhere, do anything” ethos, as they called it. When the pair started working together in the mid-80s, Mr. Bell was sought after by political leaders and corporations who wanted some of the communications magic he had provided to Mrs. Thatcher.

Bell Pottinger quickly had hundreds of clients, a few of them infamous. Mr. Bell attributes his ability to work with virtually anyone to innate optimism.

“I see the good in people,” he said.

This included Chile’s former dictator Augusto Pinochet. Mr. Pinochet was placed under house arrest in Britain in 1998 as part of an effort to deport him to Spain, where he had been indicted on a charge of torturing Spanish citizens.

After two years of legal and political wrangling, Mr. Bell and his allies prevailed when Mr. Pinochet was authorized to freely return to Chile.

Bell Pottinger was hardly the only British outfit working for rogues and despots, as well as publicly traded companies, nor was it the largest or most profitable. But it had a buccaneering spirit that made it the firm of choice for a wide variety of missions.

During the war in Iraq, Bell Pottinger had a contract with the Pentagon to produce propaganda for the United States military. This included scripts in Arabic for a soap opera that aired in the country, said Mr. Bell.

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