Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The fax that came over the transom from Visa USA’s public relations team on July 14 — the day the U.S. Department of Justice rested its antitrust case against Visa and MasterCard — was eye-catching. Titled “American Express’ Web of Deceit,” the press release depicted a spider web containing the names of seven government witnesses who either had worked for or had meetings with American Express. At the center of the web, in boldface, were the letters “DOJ.” And therein lies a cautionary tale about public relations tactics in major litigation. The graphic, which also appears on a Web site dedicated to the suit at www.visamediacenter.com, is the work of Kelly Presta, Visa USA’s vice president of public affairs. Visa USA’s legal team, from San Francisco-based Heller Ehrman White & McAuliffe, doesn’t review press releases on the lawsuit before they are published. In fact, Brent N. Rushforth, the Heller Ehrman partner assigned to deal with the press, was not aware of the spider web until The National Law Journal asked him about it. “I haven’t seen it, even as I sit here and speak to you,” he said. “I don’t know that anybody on the legal team knows anything about that.” Since the trial began on June 12, both Visa and MasterCard have insisted that only American Express will benefit if the government wins its case. DOJ alleges, in part, that the rules of both the Visa and MasterCard associations, which forbid banks that issue the cards from issuing cards of other networks, have harmed competition. If those rules are found to be illegal, American Express is the only credit card network that would be helped, both defendants contend. But their tactics have differed. MasterCard and its press team — from Edelman Public Relations Worldwide, the firm in the trenches with Microsoft Corp. as it defended DOJ antitrust charges — have been more cautious. MasterCard’s approach suggests that it may have studied the approach to media relations that Microsoft took during the lengthy trial — and learned some lessons. When that trial began in October 1998, Microsoft sheltered its legal team from addressing questions from the press on the courthouse steps. Mark Murray and others from Microsoft’s in-house PR team faced the microphones and cameras. That strategy changed in the middle of the trial, when Microsoft’s general counsel, William E. Neukom, took reporters’ questions. Noah J. Hanft, MasterCard’s deputy general counsel, has been the company’s chief spokesman from the outset of this trial. MasterCard’s daily press releases, tapped out on a laptop outside the courtroom of U.S. District Judge Barbara S. Jones by a young member of the PR team, are sent out as Hanft’s statements on the day’s testimony in court. “We very much wanted all along to make sure that our public relations strategy completely paralleled our legal strategy,” says Sharon Gamsin, MasterCard’s VP of global communications. “The message that we want to send is that there is not the sort of ‘who’s pulling the strings’ kind of strategy,” she says. “The legal issue is that there is no consumer harm.” LET’S HAVE LUNCH MasterCard has invited reporters to lunch twice since the trial began to brief them on the case. The legal team hasn’t been shy about discussing American Express’ role in the case, but they take care to frame it around the issue of consumer harm. At the second lunch, held on July 13 as the government was about to wrap up its case, MasterCard lawyers asserted that, in 1996, the government changed its position about a link between consumer harm and the associations’ exclusionary rules. The supposed reason? Harvey Golub, American Express’ chairman, decided that year that his company wanted to issue credit cards through banks. Asked whether he believed the government brought the case simply because American Express had lobbied it to do so, Hanft says, “It’s in-between,” quickly adding, “The relief that’s been proposed is relief that will only benefit American Express.” Visa USA, on the other hand, keeps suggesting that there is something nefarious about American Express’ relationship with the government. “We will continue to try to expose American Express’ role in all of this,” says Visa USA’s Presta. Asked to cite an example of actual deceit or lies by American Express, as the spider-web graphic suggests, Presta demurs. He will only say, “The embarrassments for American Express will continue. There are more egregious things that we have not put forth.” The legal team has made similar assertions before Judge Jones. In a June 29 chambers conference, Heller Ehrman’s Stephen V. Bomse told the judge that American Express “did, I believe, misrepresent and mislead the government.” At this, DOJ’s lead lawyer, Melvin A. Schwarz, lost his temper. “Frankly, I am absolutely sick of it,” he said of Visa’s claims that American Express duped the government into bringing the case. “But you are going to hear a lot more of it again, over and over again.” He was right. At the hearing, Schwarz reminded Jones of Visa USA consumer surveys about the litigation. Cited in a sealed DOJ brief, they show that “the man on the street thinks they [Visa] have a lousy case” and Visa’s advertisers advised it to “divert attention to American Express.” The DOJ brief, unsealed by Jones on July 21, quotes directly from the Visa survey: “The DOJ’s case seems fair: banks should be allowed to do whatever they want. … That is a fundamental problem for Visa and the main reason we need to keep people from focusing on the specifics of this case.” The solution? “Divert and attack” American Express. Schwarz had his say before Jones, but his hands are tied with the media. At the Microsoft trial, David Boies, the government’s special trial counsel, took to the microphones daily to address the press — the exception to the rule. Local custom at the U.S. attorney’s office in Manhattan forbids prosecutors from speaking to the press. Most of those warming the benches in Jones’ courtroom are from the PR teams. Visa USA’s team includes Tim O’Brien, who covered the Supreme Court for ABC News for 22 years and recently joined a new litigation communications team at Ketchum, the PR giant. The teams have few reporters to spin; less than a handful attend the trial regularly. Christine A. Varney of Washington, D.C.’s Hogan & Hartson represented Netscape Communications Corp. at the Microsoft trial. The defense in that case “clearly tried to persuade people that the real party-in-interest was Netscape,” just like Visa’s campaign against American Express. But she thinks Visa’s spider-web graphic is over the top. In the end, the emphasis on American Express’ lobbying role may have little impact. At the June 29 chambers conference, Jones said, “It is totally appropriate for [the government] to accept and for them to give you aid in an investigation.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.