When Greenpeace USA found itself the subject of an Internal Revenue Service audit last year, the environmental group thought it knew whom to blame: Public Interest Watch, a Washington nonprofit heavily funded by Exxon Mobil Corp. (XOM ) PIW had filed an IRS complaint against Greenpeace in 2003, accusing it of abusing its tax-exempt status. Greenpeace assumed ExxonMobil had used PIW to harass a persistent critic.
But the story, first reported last month by The Wall Street Journal, was even more complicated. PIW, it turns out, has close ties to Dezenhall Resources, a communications firm known for stealthy assaults on its clients' foes. Founder and CEO Eric Dezenhall, who is also a TV pundit and writer of mystery novels, explained his perspective in a 1999 nonfiction book, Nail 'Em! Confronting High-Profile Attacks on Celebrities & Businesses. "Damage control used to be about soft, fuzzy concepts like image," he wrote. "Now it's about survival, and this has made the battle bloodier."
Dezenhall Resources occupies a small niche within the public relations business that includes Sitrick & Co. in Los Angeles and Qorvis Communications in Washington. Kevin McCauley, editor of O'Dwyer's PR Report, a trade publication, regards Dezenhall as one of the most effective in his specialty, calling him "the pit bull of public relations."
Dezenhall frequently appears on TV and radio to critique the damage-control skills of the likes of Wal-Mart (WMT ), Martha Stewart, and even Vice-President Dick Cheney. But it's difficult to identify what he does for his own clients. Dezenhall won't name them, and he doesn't like to leave fingerprints. Interviews with people familiar with his firm reveal a shop that follows the combative credo outlined in Nail 'Em! It has been hired by lawyers representing former Enron CEO Jeffrey Skilling and by Mark J. Geragos, the Los Angeles attorney for Michael Jackson and other celebrities. Pharmaceutical giant Eli Lilly & Co. (LLY ) has retained Dezenhall in the past but won't say why. Journalist Bill Moyers, who tangled with Dezenhall's firm over a 2001 documentary about the chemicals industry, says: "I consider them the Mafia of industry."
Dezenhall, 43, grew up in New Jersey and graduated from Dartmouth in 1984. He worked briefly in the communications office of the Reagan White House and then joined a Washington PR firm before starting his own outfit in 1987. (The semi-autobiographical hero of his novels, Jonah Eastman, is an image massager and amateur sleuth who mixes with South Jersey mobsters, journalists, and politicians.) Although active in Republican politics, Dezenhall has professional admirers across the ideological spectrum, says Chris Lehane, a former spokesman for Al Gore. "They have a very good reputation," Lehane, now a communications consultant in San Francisco, says of Dezenhall Resources.
Targets of Dezenhall's tactics see things differently. "We now know who's doing the invisible work to undermine efforts to protect the environment," says Kert Davies, Greenpeace USA's research director. The IRS said last month that the group could remain tax-exempt.
Greenpeace thought its audit problem emanated from Public Interest Watch, which according to federal tax filings received $120,000 of its $124,000 in revenue from ExxonMobil in 2003, the year PIW filed its IRS complaint against Greenpeace. But a person familiar with the situation says Dezenhall Resources helped create PIW in 2002 specifically to prod the IRS to go after Greenpeace. Two of PIW's three founding board members are former Dezenhall employees: James McCarthy and Christopher Meyers. McCarthy, who now has his own PR business and until last year used space in Dezenhall Resources' Connecticut Avenue offices, declines to comment on whether the firm helped launch PIW. Meyers didn't respond to phone messages.
The third PIW founder, Michael J. Hardiman, says in an e-mail exchange that he started the group after sparring with nonprofits over land-use issues. He didn't respond to e-mail and phone messages asking about Dezenhall Resources' role. Eric Dezenhall similarly didn't respond to requests that he explain any ties to PIW. ExxonMobil declines to comment, saying through a spokesman: "It's our policy not to discuss our business relationships."
In a June, 2002, engagement involving ExxonMobil, Dezenhall Resources arranged a pro-Exxon demonstration on Capitol Hill, according to people familiar with the situation. At Dezenhall Resources' behest, the several dozen demonstrators were brought together by the conservative Washington nonprofit Americans for Tax Reform, these people say. Participants waved signs reading "Capitalism Rocks" and "Stop Global Whining." Their aim was to counter an environmental protest at an Exxon station near the Capitol.
Dezenhall resources has provided financial backing to Americans for Tax Reform, say people familiar with the communications firm. But ATR says it has no indication that the Dezenhall firm paid for the 2002 demonstration. "The staff here I spoke with said they don't have any recollection of payment for this specific event," says ATR spokesman John Kartch.
In an e-mail answer to questions about the incident, Eric Dezenhall doesn't comment on any ties to ATR but says: "We routinely support think tanks and other experts whose positions are consistent with our clients' views, and will continue to do so unapologetically." He declines to say whether Exxon has been a client.
In the mid-1990s, Motel 6, a unit of the French company Accor, was threatened with potentially embarrassing publicity stemming from claims by a couple that a peephole allowed them to be observed during intimate moments. Dezenhall wrote in his 1999 book that his investigators discovered that the peephole story was bogus and that the accusers had a history as con artists. As a result, a TV newsmagazine segment in the works never aired, Dezenhall wrote. A Motel 6 spokeswoman confirms this account.
Jeffrey Skilling's Los Angeles-based law firm, O'Melveny & Myers, hired Dezenhall in the wake of Enron's collapse in 2001. Internal Dezenhall communications from 2003 show that employees there discussed a plan to pay newspaper opinion writers to publish articles questioning the credibility and motivation of Enron whistleblower Sherron Watkins. It couldn't be determined whether the idea was put into action. O'Melveny partner Daniel Petrocelli, Skilling's lead lawyer in the Enron fraud trial, says that the relationship with Dezenhall has ended. Petrocelli says that if any anti-Watkins campaign took place, Skilling and O'Melveny didn't approve: "That's not something we would ever do."
Without confirming O'Melveny as a client, Dezenhall says: "We aggressively pitch journalists on story ideas, but we do not pay for coverage."
By Eamon Javers