INTERVIEW: Bringing PR to Russia

By bne IntelliNews August 11, 2010

Ben Aris in Moscow -

Communism didn't incorporate the concept of press relations, so when the former Soviet premier Mikhail Gorbachev decided to visit California with his wife Raisa after a summit in Washington with then-president George Bush senior in 1990, his KGB minders were at a loss. Who would organise the press and handle the Politburo chief's interaction with the ravenous running dogs of the western media?

Peter Necarsulmer was running a PR consultancy in California at that time when he got a call from the White House. "Sid Rovich called me, the senior advisor to President Bush. Gorbachev was in Washington for a summit, but he and his wife Raisa wanted to visit California. Once they left Washington, it was no longer an official visit and Sid asked me if could handle all the media relations," says Necarsulmer.

Ten days later and a full-blown media frenzy descended on Los Angeles. Gorby, as he had already been dubbed, was already an icon in the West and more than 2,000 journalists followed the Soviet premier to LA. Necarsulmer worked hand in glove with the Kremlin handlers to organise over 40 events as well as a major detente speech that Gorby gave to students of Necarsulmer's old alma mater at Stanford. Gorbachev also wanted to meet business leaders (a bit like Russian President Dmitry Medvedev who repeated much of the same trip in July). The South Korean president was in town and Necarsulmer set up the first ever meeting between the leaders of the two states. Raisa spent her time shopping. And there was even a sleepover with Ronald and Nancy Reagan. "It was a very jolly evening. It was Reagan's swan song, as he had done a lot of the work of restarting relations with Russia," says Necarsulmer who was present for part of the evening.

Necarsulmer filled in as the de facto press service for Gorbachev and did so well that after the Russians had returned to Moscow, he got a another call, this time from the Russians, who asked him to handle all the PR for a trip by 50 leading business from the Fortune 500 list to Russia that autumn.

By September, Necarsulmer was in Moscow for the first time with the delegation. Working on the fly, Necarsulmer went to see Paul Tatum, the pioneering American businessman, and persuaded him to open the doors of the Radison Slavenskaya hotel that he part-owned for a lunch for his delegation and a press conference for more than 400 journalists. "The Radisson was not officially supposed to open for another year and a half, but they cleaned out some space and held a lunch there for the visiting businessmen, which is when I got to know Tatum," says Necarsulmer.

The flamboyant Tatum was one of the first foreign investors in Russia after the thaw between east and west began, but epitomises the difficulties of doing business in Russia during the 1990s; he ran foul of his Russian partners and was brutally gunned down on November 3, 1996, taking five shots to the neck, just above the bullet proof vest he habitually wore under his suit.

Still, the press conference went so well and the KGB was so impressed with Necarsulmer that they asked him to move to Russia permanently. With American corporates like Coca-Cola also drifting into Russia, Necarsulmer opened the first PR agency in Russia, The PBN Company, in January 1991. It was the start of a rollercoaster ride that has yet to end.


That autumn Gorbachev was deposed and the Soviet Union collapsed. The daily fax that Necarsulmer sent out summing up news and reports from the city became a major source of news during the August coup and Necarsulmer went on to organise the foriegn correspondents club.

Even during the 1998 crash, when many foreign investors left, Necarsulmer decided to "tough it out." This paid off, as within 18 months Russia was booming again after Vladimir Putin took over in early 2000 and oil prices began their inexorable climb towards $150 a barrel.

Necarsulmer has always stuck to his guns and famously said in a speech to the American Chamber of Commerce in the autumn of 1998: "There is an opportunity for turning the lemon which is Russia today into lemonade. And nowhere is this more true than in governmental policymaking. The message to each and every operating company represented here today is, do not become so pre-occupied with day-to-day operational matters that you miss this unique opportunity."

Current President Dmitry Medvedev has been very active pumping out this message and seems to be bringing home the bacon; following the St Petersburg Economic Summit in June and the president's trip to the US shortly afterwards in July, the Kremlin crowed it had done billions of dollars in deals. However, Necarsulmer says that much of these promises are probably empty. "Typically, the talk of investment is more of a government-relations exercise. The promises are designed to shore up the other aspects of business and state contracts," says Necarsulmer. "The whole [procurement] process remains non-transparent and works on the basis of who you know."

Despite his obvious commitment to the Russian story, Necarsulmer remains a pragmatist. From a PR perspective, he believes the government's new "investor friendly" campaign is long overdue. "Compared to the Bric countries, Mexico or other emerging markets, Russia pales by comparison when it comes to selling itself. The events like the [Kremlin-sponsored Russian Economic Forum in] St Petersburg, [or hosting the 2014 Winter Olympic games in] Sochi are good, but they need to do a lot more than just hold these house parties," says Necarsulmer. "The competition for foreign investment has never been higher than now and if you look at the risk/reward returns in Russia, even though the returns are very high, the risks remain too high for most. The government policies to do something about this are not yet effective."

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