THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Firm says it erred on Libya consulting

Cambridge company will register as lobbyist

By Farah Stockman
Globe Staff / May 6, 2011

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WASHINGTON — A Cambridge consulting firm’s controversial bid to bolster the image of Moammar Khadafy and Libya should have been registered with the US government as a lobbying effort, an internal company investigation found.

Company officials with Monitor Group, which enlisted prominent professors from Harvard University in the effort from 2006 to 2008, said the inquiry also concluded that public relations work for foreign governments is not part of its core mission and should be avoided.

“We are putting in place new systems to make sure we do not repeat a mistake we fully acknowledge we made here,’’ said Eamonn Kelly, a senior partner at Monitor. The company will retroactively register the Libya work today, as well as a separate contract with Jordan, he said.

The company’s decision to register is likely to lead to the release of details about how much the company paid Harvard professors and other intel lectuals to visit Libya, information that has been closely held.

Kelly said the failure to register was due to a misunderstanding about legal requirements. But others said it reflects a deeper problem: The company was not transparent about the fact that it was engaged in a calculated effort to burnish Khadafy’s reputation, even to professors recruited in the effort.

“If I had known that a primary purpose of the visit to Libya was to influence public opinion in the United States, I would not have gone,’’ Robert Putnam, a professor at Harvard’s Kennedy School of Government, said in a telephone interview yesterday. Other professors said they did not feel misled.

The Monitor Group hired Washington law firm Covington & Burling to handle the ongoing inquiry. Monitor’s decision to register as a foreign agent for Libya comes as it tries to recover from a wave of negative publicity stemming from its work with Khadafy, whose forces began shooting antigovernment protesters two months ago.

Libya had hired the company, which was cofounded by Harvard professors, in 2006 to produce a strategy for economic reform. Such consulting work does not need to be registered with the federal government.

But at the same time, Libya gave the company $250,000 per month to launch a visitors program aimed at bringing influential “thought leaders’’ to Tripoli. The academics included Benjamin Barber, professor emeritus at Rutgers, and Joseph Nye, former dean of Harvard’s Kennedy School of Government.

Barber and Nye have said their role was to introduce Libyan officials to modern democratic ideals and to advise Khadafy on paths to reforms. But internal company memos leaked by a Libyan opposition group in 2009 suggest those visits were mainly aimed at improving Libya’s image in the West.

A document titled “the Project to Enhance the Profile of Libya and Muammar Khadafy’’ states that Khadafy’s dialogues with famous intellectuals “enhance international understanding and appreciation for Libya’’ as well as introduce “Khadafy as a thinker and intellectual.’’

Monitor’s chief executive Mark Fuller a former assistant professor at Harvard Business School, also proposed writing a positive book about Khadafy but later dropped the project.

Federal law requires that public relations work for a foreign government be registered with the Foreign Agents Registration Unit. Firms must also submit detailed filings of payments received and services provided.

The media attention on Monitor prompted the Justice Department to send a letter inquiring about the company’s work in Libya. Failure to register can lead to fines and even jail time, but specialists say that as long as companies try to comply with the law, such penalties are rare.

Putnam, author of “Making Democracy Work,’’ said he was never told that public relations was a goal of the visitors program. In fact, he said, he questioned Monitor officials before traveling to Libya about whether such visits could be used to bring legitimacy to Khadafy.

He said he was reassured that was not the aim of the program.

Putnam met with Khadafy but concluded weeks later that the trip was part of a public relations effort. He declined a second visit to Libya.

Monitor officials said yesterday their employees were trying to bring reform to Libya, a goal that the US government shared at the time. Kelly acknowledged that the goal of helping Libya reform got “mixed’’ with the goal of helping Libya reintegrate back into the world community.

“On the one hand, we believed that the economic, social and governmental reform processes required the introduction of new insights and leading thinking to a country that had long been isolated,’’ he said. “On the other hand, we believed that reform would also be enabled by improved external perceptions of Libya as it was reengaging with the international community.

“I don’t believe we were clear enough in our separation of these objectives.’’

Robert Kelner, a lawyer at Covington & Burling, said Monitor’s employees did not see themselves as part of a public relations effort. “They think of themselves as economic analysts and management consultants,’’ he said.

The company had gone to great lengths to investigate itself and correct its errors, expanding the review of its work from the Libya contract to all work with foreign governments, Kelner said. The inquiry concluded that a 2010 contract to help the Jordan develop a media strategy also fell under the federal rules requiring registration.

Kelner acknowledged that it might have been more difficult to recruit academics to join the effort if Monitor had been registered as a lobbyist for Libya, but he added there was no indication Monitor failed to register for that reason. He said the professors were not deliberately misled.

Kelly said the company is hiring a general counsel and introducing compliance measures.

It is unclear how the bad publicity at Monitor has affected the careers of those associated with the project. On Monday, Fuller said he will resign as chief executive, a move that company executives said he had been planning for years. Fuller will remain at Monitor, however, and focus on intellectual property issues.

The involvement of Harvard professors in the Libya work has sparked some soul-searching at the university, where some have called on president Drew Faust to warn professors that their outside work must adhere to standards of truthfulness.

In a previous interview, Nye told the Globe that he had considered Monitor’s activities in Libya aboveboard, adding that the firm asked him not to disclose how much he was paid for his trips there. Michael Porter, a former Harvard Business School professor and cofounder of Monitor, also did not return an e-mail seeking comment.

Farah Stockman can be reached at fstockman@globe.com

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