Who'll get the PR account to explain the Fed's gold swaps?

Mint Went into Damage Control over Missing Gold

Jack Branswell and Phil Couvrette
Canwest News Service
via National Post, Toronto
Sunday, November 22, 2009

http://www.nationalpost.com/story.html?id=2253586&utm

OTTAWA -- Faced with what may prove to be a huge gold heist right out from underneath its nose, the Royal Canadian Mint ordered polls and consulted with a high-powered Ottawa public relations firm as it worked on damage control, access to information documents show.

What is clear in 66 pages of notes released to Canwest News Service under access-to-information law is that as news of the missing 17,514 troy ounces of gold and other precious metals -- with an estimated value of $15.3 million -- leaked out, the mint was keen to protect its reputation.

What is less clear is just what the mint's consultations with Angus Reid, which conducted at least two omnibus polls for the Crown corporation, and Hill & Knowlton Inc., the public relations firm, told the mint.

The documents are heavily edited, with the polls being blacked out entirely.

Their media notes -- they messages they tell reporters -- say the mint "is one of the most highly regarded mints in the world and has a very strong reputation." But that reputation has been under siege as the mint has been unable to account for the missing gold since last fall.

On June 9, the government announced it had told the mint to have the RCMP investigate the missing gold.

By the end of that month and in early July, the mint may not have found the gold, but it had acquired Corporate Reputation and Sponsorship Index reports from Angus Reid. The reports were called Royal Canadian Mint: Reputation to June 30 (and the second one July 14). Hill & Knowlton also weighed in with an "Issue Analysis" on at least four occasions in June and July.

It is clear through e-mails, released with the documents, that the polls are about "our reputation in the context of the metal reconciliations file."

But the polls themselves, 48 pages of data, are marked not for public release and are completely blacked out.

To explain the heavy editing, the mint cites sections of the Freedom of Information Act that allow exemptions for commercially sensitive information, information that could harm third-party dealings and negotiations and advice or recommendations the mint hasn't put into operation.

The mint also held a July 17 conference call and part of that dealt with "Reputation Management" but again, all the details were censored.

Christine Aquino, a spokeswoman for the mint, said it is normal that the documents would be so highly censored.

"The minting industry is highly competitive, therefore this type of information is deemed confidential," she said.

"It is commonplace for the mint to conduct such research on a very regular basis for a variety of reasons, including to develop new products and programs that fulfil our mandate."

The mint also would not say how much it spent on the polls or the Hill & Knowlton work.

Charles Weinberg, a professor of marketing at Sauder School of Business at the University of British Columbia, said this is a serious crisis for the mint and that getting advice on its reputation is part of managing the situation.

"Part of the critical issues are how they deal with this crisis," Weinberg said.

"Losing $15 million worth of gold is a serious amount of money, no matter how profitable the Crown corporation is or what a small percentage of the amount of gold it has.

"Generally when something goes wrong, a tainted product or something like that, the first thing that the organization has to do is sort of acknowledge the mistake that was made and show that they're trying to understand what the cause was and providing appropriate corrective action."

The mint doesn't just make coins for Canada; it has international clients, and Mr. Weinberg said it would also be acutely aware that it has to maintain its reputation with them too.

But he said the issue isn't resonating with Canadians at this point.

"One of the unusual things about this is that unlike health scares where people get ill right away and there's product recalls where there's a real danger to people. ... This is a financial embarrassment but is not an immediate danger to anyone, so I think there's less heightened public attention on this than there otherwise would be."

"One of the questions, and they may be doing this, is to see whether or not this issue is actually on people's minds. The problem is going to be when the RCMP is finishing their investigation and either conclude whether they can find there was theft taking place or can't explain it either, and if it's theft they have to see if the theft is something the mint could have done something about."

He questioned why so much of the access-to-information request would have to be blacked out.

"The question is: Why is this such sensitive information that it can't be publicly released?"

Among other censored information in the documents is a three-page letter, dated July 7, to John Baird, the transport minister, whose department is responsible for the mint and his minister of state, Rob Merrifield.

As government department and agencies do, the mint was very closely monitoring the volume of news reports on their missing gold and tracking whether coverage was dying off or not.

"Coverage spiked once the minister announced the RCMP had been contacted. This is now truly a cross-Canada story, including in Quebec," both print and broadcast, the documents note. But a section right after that, presumably talking about that coverage, is blocked out under the law's exemption to not release information that is advice that hasn't been acted on yet.

The mint's final report on the missing gold and other precious metals is expected to be released soon. The RCMP investigation into the case is ongoing.

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