It’s been a very bad week for the Harper government and it’s likely to get worse.
The release of the Auditor-General’s Spring 2012 Report last Tuesday contained explosive allegations that senior Department of National Defence (DND) officials flouted government rules, misled ministers and Parliament, and concealed cost overruns to ensure the military would receive the F-35 jet fighters it wanted. And it suggested that senior government officials likely played along.
In his assessment of the A-G report, Ottawa University defence policy expert Phillipe Lagassé explains that DND officials intentionally underestimated the cost of the F-35, embellished the possible industrial benefits associated with its acquisition, failed to analyze the risks involved in the deal, and did not provide adequate evidence to support the sole-sourced acquisition of the stealth fighters. The A-G also reported a $10 billion gap between what the government publicly communicated the program cost would be (first $9B and then $14.7B) and what it’s own internal estimates, and working figures, revealed (at least $25B). This was a gap the A-G suggests the government may have whitewashed: “That $25 billion number was something I think that at that time was known to government…It would have been primarily members of the executive.” Or as Lagassé put it more directly: “although DND and the Chief of the Air Staff are identified as the main culprits in this saga, there is no question that Conservative ministers are also to blame.”
One of the factors which led to the May 2011 federal election was the government’s refusal to present a full costing of the F-35 program, among other major spending commitments, in addition to details about the procurement process. When the Parliamentary Budget Officer (PBO), Kevin Page, released his own report in March 2011, pegging the cost of the stealth jet program closer to $30-billion (over 30 years), he came under fire from the ruling party. Conservative MP Laurie Hawn challenged the report’s methodology and dismissed the PBO’s data as “speculative” and “illogical”, an argumentative strategy advanced by other government and party spokespeople at the time. When the issue was raised during the election, the Prime Minister claimed repeatedly that the program would cost roughly $15-billion and even dismissed Pentagon data putting the per-jet cost at more than double official estimates.
The PBO and A-G reports raise serious allegations of mismanagement and pose a significant communications problem for the government. Neither Page nor Michael Ferguson, the Auditor-General, have a partisan axe to grind. Both are Conservative appointees, and the latter holds one of the highest profile and most respected public offices in the land. The government cannot dismiss their allegations of fiscal mismanagement and obfuscation as mere politics. The A-G report in particular, and the fallout that we are now beginning to observe, deals a serious blow to the Conservatives’ carefully and (arguably) effectively crafted image of itself as the party of fiscal prudence, competent administration, ethics, and transparency.
The Harper government is now fully engaged in a crisis management exercise that began more than a year ago. William Benoit, a communications professor at Ohio University who specializes in political campaigns and crisis communication, presents a theory of image repair which describes five general strategies an organization (government or corporation) will use to manage the damage to its reputation after it has committed or been accused of wrongdoing. The theory is both analytical and prescriptive–we can use it to make sense of a strategy or as a guideline for developing strategic options. Benoit argues that it’s not reasonable to form a negative impression of an organization unless the organization is believed to be responsible for the offense it is alleged to have committed. Responsibility can take many forms: an organization can be blamed for acts it has directly performed, ordered, or facilitated. Responsibility can also appear as a result of acts of omission, such as the failure to properly prevent something bad from happening, or of looking the other way and permitting that event to occur.
Ultimately, when it comes to responsibility and blame, perceptions are more important than reality. Thus, it may not matter whether the Conservatives actively misled Parliament and Canadians about the cost of the F-35 program, whether they were manipulated by DND officials, or whether they were complicit in allowing the latter to game the procurement process. What matters is whether Canadians believe they are guilty of wrongdoing. The government’s image and reputation is highly vulnerable and at risk.
Benoit’s theory of image repair allows us to ask and answer: what can a government or corporation say when they have committed wrongdoing or face the perception that they are guilty of wrongdoing? He suggests that in managing a real or potential threat to its image, organizations will deny the existence of the crisis, evade responsibility, seek to reduce its offensiveness, offer corrective action, and/or apologize and seek forgiveness.
The’ response to the F-35 crisis suggests both an awareness of Benoit’s theory and an application of some of its key components:
Denial: there are two possible tactics for denying the existence of a crisis. Simple denial involves the refusal to acknowledge that something bad has happened, whereas blame displacement involves accusing others of having committed the act. The refusal to accept the PBO’s $30-billion price tag and to deny allegations of a multi-billion dollar program cost gap was the first step in the managing the threat to its image of sound fiscal management. A variation on this strategy of denial would be to suggest that blame for the differences in cost projections should be rest at the feet of senior DND officials, although the government has not pursued this line of argument and defence.
Reduce Offensiveness: facing allegations of wrongdoing, organizations can stress the benefits of their actions, minimize the seriousness of their actions, differentiate their harmful actions from even more serious ones, argue that there are more important considerations to account for, reduce the credibility of their attacker, or offer to compensate or reimburse those who have been harmed. The government has clearly pursued this line of image defense in three key ways:
1. It has repeatedly defended the purchase of F-35 stealth jets as the best equipment for Canada’s military, an argument it’s pursued since 2010 when the cost of the program first surfaced as a major problem;
2. It has dismissed the seriousness of the allegations by describing the $10 billion cost gap as a simple difference in accounting. Key to this tactic has been the mobilization of third party support, from academics to former defence department officials;
3. It has claimed that no jets have yet been purchased and, in contrast to the Liberal sponsorship scandal, the government has not yet misspent public money
Corrective Action: the key characteristic of this image repair strategy is to present a plan that will solve or prevent the recurrence of the problem from happening again in the future. The Conservatives were quick to respond to the A-G report by accepting its conclusions and acknowledging the importance of improving transparency in the procurement process by promising a complete and public review of the program, and setting up a new secretariat inside of the Department of Public Works to oversee the project. More serious corrective actions might involve changes in personnel, including demoting the Minister or senior DND officials. However these steps would indicate that the government acknowledges the seriousness of the offense it is alleged to have committed and an admission of culpability or guilt. Neither of those options appears tenable at the moment; yet, as more information comes to light, including a clearer sense of how Canadians are responding to the crisis, this could change.
The Harper government has 3 years remaining in its majority mandate so isn’t vulnerable to an imminent collapse. Nevertheless, the long term implications for the Conservative image and brand are significant. The government has spent several years framing itself as trustworthy, competent fiscal managers who exercise sound governance and are committed to ethics. The allegations contained in the A-G report (and suggested in the PBO report before it) strike at the heart of that image and suggest a serious failure in regulation, oversight and transparency. Images, brands, and reputations are only ever virtual, which is why the Conservatives have also acquired a reputation (with equal amount of resonance) for secrecy, information control and evasive spin doctoring. Language and rhetoric, both in terms of how images are attacked and how they are managed, once they’ve been damaged, are crucial, particularly in times of crisis. The full implications of the F-35 scandal remain unclear, and will continue to take shape in the coming days and weeks as all sides engage in a battle over its framing. The Conservatives are likely to keep the debate focused on the issue of total cost, where they can continue to emphasize differences in budgeting formulae; the opposition are likely to remain focused on questions about the procurement process, and why the government appears to have been cagey with Canadians over the numbers it shared publicly against those it used privately. However the debate unfolds, there should be no question that the government is on the ropes, that it has taken a significant reputation hit, and is bringing the full force of its crisis communications capacity to the situation.