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.

" data-mediaviewer-credit="Dumitru Doru/European Pressphoto Agency" itemprop="url" itemid="" style="height: auto; max-width: 100%; display: block; width: 570px;">

During its 30 years in the upper echelons of Britain’s spin doctoring game, Bell Pottinger sought to polish the images of dictators like the Belarus president, Alexander Lukashenko, left, and Augusto Pinochet, Chile’s president, right, and celebrities like Oscar Pistorius, center, the Olympic runner after he was charged with murder. Credit Dumitru Doru/European Pressphoto Agency

When the company’s client list did not generate news, its methods did. In 2011, it was caught boasting about its skills in the dark arts of search engine manipulation to people it thought were potential clients.

In fact, they were undercover members of the Bureau of Investigative Journalism, a nonprofit organization that works with a variety of media. Posing as executives from the made-up Azimov Group, these “representatives” said the company had ties to the Uzbekistan regime, which has been criticized for repression and for using forced child labor during its cotton harvest.

The Azimov executives said they worried about blowback.

Fret not, said Tim Collins, a Bell Pottinger managing director, per transcripts published by The Independent, a British newspaper. After the company applied its tech wizardry, “You get to the point where even if they type in ‘Uzbek child labour’ or ‘Uzbek human rights violation,’ some of the first results that come up are sites talking about what you guys are doing to address and improve that, not just the critical voices saying how terrible this all is.”

Mr. Bell never challenged the transcripts, but he denounced the sting at the time as an “unethical, underhand deception to manufacture a story where none exists.”

Beginning of the End

Bell Pottinger’s slide into oblivion began with a visit to the Guptas in January 2016. Mr. Bell, who had worked in South Africa for years, said he had no idea what the brothers wanted, but he and several colleagues flew to Johannesburg to find out.

“We went to this bloody great mansion, which seemed to be their headquarters,” Mr. Bell recalled. “Great big room, huge sofas all over the place. Servants. Appalling, all of it.”

The family already had a fortune, Tony Gupta told the small entourage. Now, he and his brothers wanted to help poor blacks. To that end, they wanted a P.R. campaign that pushed the idea of economic emancipation.

“So we went back to London and wrote a strategy,” said Mr. Bell. “Town hall meetings, marching in the street, that kind of thing. Draw attention to the economic imbalance, then tell people they should protest and demand change.”

Atul Gupta, left, and Ajay Gupta, two of the three brothers from India who earned fantastic sums leveraging their friendship with Mr. Zuma. Credit Martin Rhodes/Gallo Images

The company drafted a two-page proposal, a copy of which was reviewed by The New York Times. Among its recommendations was “a non-party political narrative around the existence of economic apartheid” that Bell Pottinger would package “into speeches, news releases, website content, videos/broadcast content, slogans and other material required.”

Soon, the Guptas said that their company needed communications help, too. Most South Africans, the Guptas maintained, had an inflated notion of how much of the family’s revenue came from government contracts, which harmed their interests, several Bell Pottinger employees recalled.

The corporate campaign was the first sign that altruism had little to do with the £100,000 a month that Bell Pottinger would earn during what was initially a three-month project. The second was the anger of the company’s other South Africa clients when they learned of the arrangement.

The billionaire Johann Rupert was aghast to suddenly find himself one of the most prominent examples of “white monopoly capital.” He texted Mr. Bell and asked how his P.R. firm could also be working for a family that was bashing him. Mr. Bell, by his own account, quickly lost enthusiasm for the Gupta project.

“It was altogether smelly,” he said of the racial element of the work. But he quickly added that ethics were not the issue. If enough South African clients quit Bell Pottinger, he reasoned, the losses would outweigh the Guptas’s checks. “I was saying it’s not a commercially sensible thing to do.”

But by the end of March, only one client — the banking and asset management company Investec — had severed ties with the P.R. firm. After that, Bell Pottinger tried to find middle ground by signing a new contract with the Guptas, this time with a codicil literally called an anti-embarrassment clause. It allowed the firm to terminate the account “without notice” if the brothers brought discredit to the business.

Mr. Bell said he soon resolved to quit the company because he felt undermined and undervalued by Mr. Henderson. “He made my life a misery from start to finish,” said Mr. Bell, speaking one recent afternoon in the living room of his home near London’s Sloane Square. After negotiating a £3.5 million exit package, Mr. Bell resigned in August 2016.

A vicious boardroom struggle unfolded at Bell Pottinger after its work for the Gupta brothers was revealed. It pitted a co-founder, Tim Bell, left, against James Henderson, who ran the firm in the years before it closed. Their conflict centered on the perennials of business potboilers, namely power and money. Credit Sarah Lee/Eyevine

For his part, Mr. Henderson declined in a recent interview to indulge in the put-downs that come so easily to his antagonist. Seated at a conference table in temporary offices in Mayfair, where he is starting a new P.R. firm, he said Bell Pottinger’s dissolution was too recent to discuss.

“I have huge empathy for all those impacted,” he said, “and believe now is not the appropriate time to go into details.”

Inflaming Tensions

The P.R. campaign in South Africa, which started in 2016, was intended to raise the temperature of race relations. And it worked.

More than 100 fake Twitter accounts were created, all of them retweeting content from other Twitter accounts with names like @economycapture, according to media reports. Popular hashtags included #WhiteMonopolyCapital and #RespectGuptas. The campaign involved some 220,000 tweets.

There were also attack website with names like WMC Leaks and WMC Scams. Another part of this ecosystem were mainstream media outlets owned by the Guptas, like ANN7, a 24-hour news channel, and The New Age, a daily newspaper.

As the campaign spread, leaders at groups like the A.N.C. Youth League gave inflammatory speeches, decrying the “stranglehold” that rich whites had on the economy. Leaked emails would later show that the groups received media training, and in some cases funds, from Oakbay.

An atmosphere of menace slowly pervaded the country. In July 2016, the police minister announced the creation of a task force to investigate the murder of more than a dozen political figures. In the run-up to municipal elections that year, Mr. Zuma described the Democratic Alliance, the A.N.C.’s main rival, as a “white party,” adding that it could not “run this country no matter how they cover up by getting a few black stooges.”

New and radical groups like Black First Land First sprang up, holding public rallies to fulminate against whites. At one, in May 2016, a pastor named Xola Skosana told the crowd, “We have been wounded beyond measure. Let us find the pillars and bring the house down. Black people must be avenged.”

For the first time in years, whites felt a rising sense of personal danger. Nicholas Wolpe, a white South African whose father was a pioneer of the anti-apartheid movement, remembers a palpable anxiety. “There was a shift toward intolerance,” he said. “Gradually, the debate about white monopoly capital was everywhere and the people talking about it were loud and belligerent. It struck a nerve.”

In a related and surreptitious campaign, the Guptas were being recast as warmhearted people eager to help the downtrodden. A website connected to Black First Land First ran editorials defending the brothers, suggesting in one that they should be “praised for saving jobs.”

President Jacob Zuma has been swept up by investigations into the Gupta brothers amid an outcry that he let them hijack the government. A march last April in Pretoria. Credit Mujahid Safodien/Agence France-Presse — Getty Images

“Me and others felt that there was something strange going on under the surface of this onslaught,” said Pieter-Louis Myburgh, author of “The Republic of Gupta.” “Long before Bell Pottinger’s role became known, we smelled a rat.”

The campaign coincided with a period in which the Guptas badly needed a makeover. The brothers had moved to South Africa from Uttar Pradesh in India in 1993 at the behest of their father, who thought the end of apartheid was a terrific business opportunity. The Guptas befriended a variety of A.N.C. luminaries, including Mr. Zuma.

Relationships with politicians were soon producing results, said Mr. Myburgh. In 2016, South Africa’s Sunday Times listed Atul Gupta as the seventh richest man in the country, with a net worth equivalent to more than $700 million.

The brothers had operated in relative obscurity until 2013, when a jet filled with some 200 guests attending the four-day wedding of a Gupta niece was given permission by a highly placed official to land at an air force base that ordinarily barred commercial traffic. The public was incensed.

From there, the publicity would only get worse. Politicians described being summoned to the Gupta compound and offered ministerial jobs and, on occasion, multimillion-dollar bribes.