Wed, Feb 23, 2011 - Page 9 News List

Protecting a reputation when privacy violations turn viral

By Paul Sullivan  /  NY Times News Service, NEW YORK

Two types of privacy violations scare people with wealth and a reputation to protect: the isolated annoyances and the breaches that go viral. How to prevent the privacy violations from happening or, if that fails, handling the fallout was the focus of a timely and provocative discussion on Tuesday last week.

Eugene Callahan, a lawyer with Wormser, Kiely, Galef & Jacobs, told a story about the first type of violation, the annoying kind. He said he recently looked down at his BlackBerry and saw an e-mail sent from himself. Far from being a to-do list, it was an entreaty from him to send money to Scotland to cover his hotel bill. Callahan, in New York at the time, knew his e-mail account had been hacked, but rectifying the problem proved more difficult.

“It took five days of talking with Microsoft to establish I am who I am,” Callahan said at the discussion, “Family Reputation Management in the Internet Age,” sponsored by Wells Fargo Private Bank. “It was a nightmare.”

Yet as isolated incidents go, it will do no damage to his image. When a privacy violation goes viral, though, the long-term impact on someone’s reputation is not so clear.

That has become an issue for August Busch IV after his companion, an aspiring model, was found dead in his bed two months ago with a significant amount of a powerful painkiller, oxycodone, and cocaine in her system.

Busch was the head of Anheuser-Busch when it was sold more than two years ago to a Belgian company, InBev, a move widely criticized in St Louis, his hometown. So he had no reservoir of good will to draw on when the death was reported. And an online search of his name quickly turns up a reference to the death.

This is the nature of scandal today. It spreads quickly and leaves a seemingly permanent stamp on one’s reputation.

“Our society is built on a social contract,” said Keith Whitaker, director of family dynamics at Wells Fargo Family Wealth. “This is a fundamental challenge for us around privacy and personal responsibility. We can’t jettison our grandfather’s past without taking personal responsibility for ours.”

Yet disclosure can occur on a smaller, almost inadvertent scale, and still have a troubling impact. Whitaker recalled a girl who was ostracized by her classmates for the first two years of college because she spoke openly about her family’s wealth. For her, it was natural to travel on a private jet and to spend thousands on shopping trips to New York. Her classmates thought she was spoiled. The problem, he said, was that her parents had never talked to her about what she should and should not reveal about them.

So what does a family do to protect its reputation, since its ability to earn a living is tied to its public image? In an age when even a sterling reputation can be quickly tarnished, the answers are not entirely comforting.

PREVENTION

The best advice is to avoid doing anything that can damage your reputation. However, for families whose names are linked to their companies or status in their communities, even a small indiscretion can be magnified in the public eye.

Parents, for instance, who fear having the family name dragged through the mud need to talk to their children about the value of that name. Susan Massenzio, director of family dynamics for Wells Fargo Family Wealth, said she stressed three points in talking about a family’s financial reputation: education, communication and moral character.

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