Barely two years after the World Wide Web began to achieve widespread popularity, there's seemingly no major business that hasn't taken advantage of the medium to spread its message. The Web lets you sell. The Web lets you advertise. The Web can improve your image. But it can also get you nailed. Anyone from a disgruntled former employee to a dissatisfied customer can spread his or her own messages. The Web, in effect, makes companies public targets for their enemies.
Some companies are finding their every sin is being catalogued and put on display for all to see. Others, good corporate citizens, are being pilloried by individuals out to do harm for harm's sake.
Be they whistle blowers or simple miscreants, business bashers are out there. The cost to business so far is anyone's guess. But trying to stop them is often a task no company should contemplate lightly.
"I'm still not brave enough to tell you the trouble Intel tried to cause for me," said attack site operator Robert Collins of Plano, Texas. "Let's just say should I unexpectedly find myself unemployed [as a result of the operation of his site], I'd have a rock-solid basis for suing them for millions of dollars."
So far, many companies are reacting with caution, as they well might. Here are three live examples:
Since starting with the firm in 1981, Lissack had done dozens of deals with municipalities totaling $25 billion. Among them: twice financing the New Jersey Turnpike at $2 billion a pop.
Lissack loved what he did but claims he had a heavy conscience. Many of the deals he put together, he says today, were done under false pretenses and resulted in losses to taxpayers. In all, Grant's Municipal Bond Observer estimates, taxpayers may have paid as much as $1 billion in ill-gotten fees between 1991 and 1993.
So one day Lissack decided to get out. He began informing on his bosses to the Securities and Exchange Commission and the FBI in December 1993. In February 1995, he told his supervisors that he was cooperating with the feds, whereupon, he said, he was fired.
Faced with unemployment and deferred compensation, Lissack sued to get his money back from Smith Barney. The firm told him to go away. He didn't. He's now asking for $75 million in damages, while Smith Barney has countersued for $15 million, claiming Lissack has tried to damage the company by spreading false and derogatory information.
Characterize it any way you want, but Lissack has worked with federal investigators and put up a World Wide Web site to let the world know about what the SEC, FBI and others have alleged about the business he was in. He calls it the Municipal Bond Scandals -- the Web site.
Were Lissack a simple crackpot, it would be easy to dismiss his work. But there's far more to his site than that. Instead of spouting off about what he thinks is true, he spends most of his time detailing what others have found. Dozens of articles from national publications, such as the Wall Street Journal, the New York Times, the Bond Buyer and Grant's Interest Rate Observer, detail alleged wrongdoing by Goldman Sachs, Lazard Freres, Merrill Lynch, First Fidelity and Wheat First, and Butcher & Singer, among others.
Lissack reserves special treatment for his former employer, however. The Smith Barney page, replete with ersatz logo and drawing of a pickpocket earning money "the old-fashioned way," details five separate allegations he has made against the investment house.
Smith Barney says little about the Web site. "We're not going to discuss it," spokesman Robert Connor said. "Our only interest is in our own page. Mr. Lissack can do whatever he pleases."
Smith Barney's attorneys see things a bit differently.
Since mid-June, counsel for Smith Barney have threatened Lissack with legal action unless he removes all references to the company:
"Your willful intent to violate travelers' rights is evident from the fact that you have named your home page 'The Smith Barney Page,' copying faithfully the Smith Barney mark. Your intent is further evident from your repetitive use of 'Smith Barney' within the page, causing search engines on the World Wide Web to find your page as one of the most relevant on the subject of 'Smith Barney.' The likelihood of confusion you have created is self-evident."
Fearing further attempts to silence him, Lissack now devotes part of his site to the back and forth between the parties. He has not heard from the company since posting its complaints.
"They don't like what they read, so it's time to censor me," Lissack said. "I guess the truth hurts."
Lissack's lawyer, Ray Beckerman, added, "I think they may have backed down. They may have gone to a real attorney who told them they don't have a leg to stand on."
To date, Smith Barney has settled out of court with officials in Orange County, Calif., over the role it and other companies played in the county's bankruptcy, and settled with a minority underwriter who claimed he was cheated out of commissions on another deal in Florida. The company has admitted no wrongdoing, however.
A whopping 40 million bytes of information, the Web site is a compendium of information designed to embarrass McDonald's Restaurants. From zoning battles to attempted labor actions and street protests, there's something about the company's actions in more than a dozen countries. And it all started over a simple leaflet.
In 1990, two members of the London office of Greenpeace began distributing a leaflet that accused McDonald's of a host of misdeeds, from clear-cutting the rain forest to involvement in "economic imperialism, which keeps most black people poor and hungry while many whites grow fat."
Tinged as it was with arguments familiar to most readers of communist and anarchist literature, many companies would have laughed off the incident. Not so McDonald's. The U.K. subsidiary suddenly found itself accused of destroying millions of acres of rain forest, the holiest of holies in the environmental movement. So the company fought back, telling pamphlet distributors Helen Steel and Dave Morris to cease their activities or face a libel proceeding. Steel and Morris chose the latter, celebrating their second anniversary in court earlier this month.
In the five years since hearings began, each side has tried to prove the truth or falsehood of each of the allegations. In so doing, plaintiffs and defendants have unearthed massive amounts of data about McDonald's, all of which is now of public record.
Site operators in the U.K. known as the McInformation Network said they do what they do to spread the word about what they claim is a societal menace. Franny Armstrong, spokeswoman for the group, says volunteers handle all the work.
"The thing about McDonald's that makes them different from other companies is they have a habit of suing people who say things against them," she said. "They spend $1.5 billion a year on advertising. We think people should have an opportunity to hear the other side."
McDonald's U.K. spokesman Mike Love countered that the ongoing trial isn't about advertising, but simple facts. "The substance of the case is whether these allegations are true," he said. Though Love said little about most aspects of the Web site, he did say McDonald's spent part of the last week of testimony trying to link operation of the site to the two defendants, an allegation the defense has vigorously denied.
Since the offending pamphlet is already on the Web, the site operators would seem a likely next target if the court rules in McDonald's favor. But shutting it down will likely prove next to impossible; McInformation already has identical sites in the U.S., the Netherlands and New Zealand, where libel laws are far less restrictive. What's more, the site maintains a "McInformation kit"; that is, the entire site compressed and ready for downloading in a single Internet file to any site in the world, just in case things get too difficult at home, Armstrong said.
Despite an ongoing court battle that has banished the McLibel pamphlet from the streets, Love claims silencing critics isn't what the battle is about. "The point isn't to stop people from saying these things," he said. "It's to show these things are untrue."
Collins operates the Intel Secrets site, a Web site that specializes in exposing the shortcomings of the documentation written for companies that want to develop hardware and software to work with Intel products. Though Intel executives downplay the impact of the site, it's clear it's been a source of embarrassment to the company. Not only has Collins highlighted errors in Intel's work, but has also publicly warned the company not to be too aggressive in pursuing him over it.
Company spokesman Chuck Mulloy said Intel executives "don't dispute his right to have that site. Our concern relates to the use of the Intel logo."
But since last summer, Collins said he has endured two separate investigations by Intel attorneys, each of which has revealed no wrongdoing.
"In our view [what he's doing] is no different than defacing our building," Mulloy said.
Now a senior manager at a major hardware manufacturer in Texas, Collins has helped two of Intel's biggest competitors reverse-engineer, or clone, some of Intel's best-selling chips. Research helped him find shortcomings in the documentation.
Collins wrote papers outlining his discoveries and sold them to companies he worked for. And he kept the rights to those papers, eventually publishing some in Dr. Dobbs Journal, a prestigious hardware business publication.
But then he discovered his work was showing up on the Internet -- sometimes with attribution, sometimes without.
"I began seeing one or two pieces of stuff that were uniquely mine, and this torqued me off a lot," the plain-spoken engineer said. "Then I saw my stuff quoted in a book. I thought, I own this research. I'm at least going to publish it myself."
According to Collins, Intel once did a very good job of documenting what it did for engineers who needed to develop hardware and software to work with its products. Whatever Intel wrote about its processors through the mid-1980s was always reliable, he said. But around 1986, things began to go awry, he claimed. Documentation sometimes had errors, at other times was incomplete and, at times, was changed in error after the fact. So he wrote about these things.
Collins first contacted Intel after receiving a tip that company employees were investigating him. Since Collins' site contained much information that appeared to be proprietary, Intel attorneys told him, they feared he had breached nondisclosure agreements. After several calls, Collins convinced the company he had never had any nondisclosure contract with Intel.
By the end of 1995, he'd been given a clean slate.
For a while, it appeared the two sides had come to an agreement. Come February, though, Intel threatened to sue over Collins' use of the Intel mark as part of his site. Collins posted the registered letter to his site and responded with a letter of his own, asserting his right to use the Intel logo as part of a larger parody. Intel acquiesced, Collins said.
Intel acquiesced, that is, until June, when the company threatened to sue again. Why this happened wasn't clear to Collins, but the action followed his attempt to register his site's name and logo with the Patent and Trademark Office.
Collins said he's been harassed for highlighting Intel's shortcomings. Intel said it's only protecting what's rightfully Intel's.
"There's millions of dollars invested in that brand. Fortune magazine recently ranked our brand one of the top 10 brands in the world," Mulloy said. "If you don't protect your brand, you lose it."
| FACT FILE |
The Web's a bit less chummy than it used to be. Check out these links for some examples:
The Municipal Bond Scandals page:
lissak.com
The companies' own home pages:
Smith Barney Inc.:
nestegg.iddis.com/smithbarney |
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