Tyco Begins Lobby Effort

Shell-Shocked Company Tries to Rebuild Its Tarnished Image

Posted April 2, 2004 at 4:11pm

Don’t expect to find a $15,000 umbrella stand at this K Street outpost.

Two years after Tyco and its disgraced CEO, Dennis Kozlowski, became symbols of corporate greed, the embattled electronics company is building up its Washington office in an effort to restore integrity to the company name.

In the next few months, Tyco plans to quadruple the size of its Washington office, start a political fundraising operation and launch an expensive advertising campaign designed to polish its image inside the Beltway.

“We’re working on regaining the trust,” said Fruzsina Harsanyi, who took over Tyco’s Washington operations six months ago. “If we can build the company’s reputation in Washington, it has a ripple effect throughout the country.”

The company’s renewed investment in Washington comes as its former chief executive stands trial in New York for allegedly using the company checkbook to fund millions of dollars in personal expenses.

Kozlowski became the poster child for excessive executive perks after a home video of the $2 million birthday party he threw for his wife on a Mediterranean island was played on the evening news. On Friday, the judge in Kozlowski’s trial called a mistrial on the 12th day of jury deliberations.

In Washington, Tyco has also come under fire from Members of Congress for moving its headquarters to Bermuda to avoid its U.S. tax bill.

By turning on the charm offensive in Washington, Tyco hopes to shed its image as a corporate bad boy and prove to Members of Congress that it is a new company.

Instead of being known for the extravagant lifestyle of its former chief executive, Tyco wants to be known as the company that helped decontaminate the office of Majority Leader Bill Frist (R-Tenn.) after ricin was discovered.

Or the company that volunteered one of its boats to help search for bodies in Baltimore’s Inner Harbor after a water taxi overturned. Or the world’s largest maker of duct tape.

If nothing else, the company wants lawmakers to know that it’s a $36 billion electronics manufacturer with 150,000 U.S. employees.

The changes in Washington are part of a broader remake at Tyco. In the past two years, the company has replaced Kozlowski, its entire board of directors and 250 members of its executive team.

The decision to hire Harsanyi is an example of the company’s new emphasis on integrity.

Harsanyi, a Hungarian refugee who once hoped to be a college professor, has more than 30 years of experience in Washington. She lectures at Georgetown University and sits on the board of directors of the National Foreign Trade Council, Arena Stage and the Bryce Harlow Foundation, a charitable organization run by respected Washington lobbyists.

“I was brought on to build up the company’s reputation and to gain a world-class Washington operation,” Harsanyi said.

Harsanyi plans to hire a handful of new lobbyists and bring on a Washington-based spokesman for the company.

She also plans to take better advantage of trade associations. The company’s new CEO, Ed Burns, has joined the prestigious 150-member Business Roundtable, and the company plans to ramp up its work with the National Association of Manufacturers and the National Foreign Trade Council.

“If you are going to be effective in Washington, you can’t be a stealth operator,” Harsanyi said.

Last week, Tyco registered its first political action committee to show that it plans to put its money where its mouth is.

In the next few months, the company plans to roll out the next phase of an inside-the-Beltway advertising campaign to polish the company’s image.

The advertising campaign will supplement an interesting lobbying approach Harsanyi plans to utilize on Capitol Hill.

The company currently employs Hill & Knowlton and Greenberg Traurig, and Harsanyi said Tyco will hire outside lobbying firms on an “as-needed basis.”

But instead of just relying on hired guns, Tyco is training 50 of its employees around the country to become part-time lobbyists who will travel to Washington from time to time to meet with Members.

“We want our own people to talk to public officials,” Harsanyi said.