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Execs can't win in testifying on Capitol Hill

Toyota's president is likely to learn what other corporate kings have when appearing at congressional hearings.

February 23, 2010|By Kathleen Hennessey and Walter Hamilton
  • Akio Toyoda is scheduled to appear before a House panel. Some companies have expertise in preparing congressional witnesses, dispensing advice both mundane and strategic.
Akio Toyoda is scheduled to appear before a House panel. Some companies… (Toru Yamanaka / AFP/Getty…)

Reporting from Los Angeles and Washington — When Akio Toyoda, president of Toyota Motor Corp., testifies Wednesday before the House's oversight committee about his company's massive recall efforts, he'll probably learn a lesson many other powerful top executives have figured out the hard way.

The televised hearing is theater, and the corporate chief is not the hero.

"The purpose of these hearings is to grill these people, to use them, essentially, as props to make a policy or political point. You are there to be a fish in a barrel," said Jack Quinn, who as White House counsel for President Bill Clinton testified before Congress and now advises corporate clients on the fine art of being an easy target.

Quinn's firm, Quinn Gillespie & Associates, is one of several with expertise in preparing congressional witnesses, evidence of the prevailing wisdom that a good hearing on Capitol Hill isn't too bad -- but a bad hearing can haunt a company for years.

Along with lawyers and lobbyists, these consultants dispense advice both mundane (don't drink too much water or you may have to excuse yourself) and strategic (don't expose yourself to legal liability).

In conference rooms around Washington, chief executives who are far more accustomed to doing the grilling are grilled themselves in mock hearings in the days before their testimony. They often are counseled to reach out to lawmakers on the committee to try to "humanize" themselves. Their advisors whisper words such as "humility" and "restraint" and repeat something men and women at the top of their game often don't like to hear.

"You're going to get hurt. But if you only get hurt a little, you're OK," said longtime Washington attorney Robert Bennett, whose clients have included Clinton in the Monica Lewinsky affair and Enron Corp. "You can't go in and win."

But you can lose, crisis management experts said.

The cautionary tales loom large. In 1994, the seven executives of the Big Tobacco industry repeated one after the other that nicotine wasn't addictive, a statement that was out of sync with science and public sentiment. In 2008, auto executives coming to Washington in search of a financial lifeline arrived via private jet. That image overshadowed nearly all other statements made in the hearing.

"It screamed arrogance," said Quinn, who said his firm briefly was retained by Toyota before the firm discovered a conflict of interest. "You want people to think you understand people's concerns. You want to come in and say, 'Kids shouldn't smoke.' You want to be someone who gets it."

In that category, experts place Edward Liddy, who had the unenviable task of testifying last year about why fallen insurance giant American International Group Inc. paid out millions in employee bonuses after accepting a massive government bailout.

Liddy stressed that he found the bonuses "distasteful," but explained that AIG was contractually obligated to make the payments. He appealed to patriotism and said he was doing his best to prop up the company to repay taxpayers.

"Six months ago, I came out of retirement to help my country," he testified.

He also mitigated some of the legislators' anger by recounting the death threats against employees.

"He had some really stark, interesting lines," said Yash Gupta, dean of the Carey Business School at Johns Hopkins University. "He connected with American values."

Toyoda, who is nicknamed "The Prince" and is the grandson of the company's founder, initially declined an invitation to testify before the House Committee on Oversight and Government Reform, which is investigating the recall of millions of vehicles because of a sudden acceleration problem. At least 34 deaths have been blamed on the malfunction.

Japan's parliament does question witnesses and government officials, and Japanese reporters do grill executives at news conferences. But neither has the dramatic flair of a Capitol Hill hearing, said Daniel Sneider, a professor at Stanford University's Shorenstein Asia-Pacific Research Center.

"They don't seem to have the same confrontational political theater that we engage in, with the 12 senators looking down at one witness at the table," Sneider said. "I'm fairly certain this will be a unique experience for Mr. Toyoda."

The company would not comment on its efforts to prepare its president for his testimony, though a spokeswoman did confirm Toyota had retained Glover Park Group, a well-connected communications firm co-founded by former Clinton Press Secretary Joe Lockhart.

Experts said Toyoda's advisors probably started prep work with intelligence gathering. An executive needs to know whether he or she has allies on the committee and exactly what the tone of the hearing will be. Then the witness often tries to reach out to lawmakers personally, either with a telephone call or personal visit.

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