It’s hard to imagine worse timing for the current board and senior management of Campbell Soup Company.
In the thick of a battle with an activist investor for control of the company, they're now having to deal with Campbell’s’ name being dragged into the miasma of hate speech and conspiracy theories on social media — as well as calls for a boycott of the company.
The PR nightmare resulted from an Oct. 22 tweet by longtime Campbell’s’ Vice President of Government Affairs Kelly Johnston in which he repeated an unsubstantiated right-wing conspiracy theory that the Open Society Foundations founded by liberal billionaire George Soros had arranged for “troop carriers” and “rail cars” to help migrants in the caravan headed from Central America to the United States.
“@OpenSociety planned and is executing this, including where they defecate,” Johnston tweeted. “And they have an army of American immigration lawyers waiting at the border.”
On Oct. 23, The New York Times’ Kenneth Vogel posted a screen shot of Johnston’s tweet (Johnston has since deleted his Twitter account) and asked Campbell and Johnston for comment.
Open Society tweeted: "Neither Mr. Soros nor Open Society is funding this effort. We are surprised to see a Campbell Soup executive spreading false stories. We do support the historic U.S. commitment to welcoming people fleeing oppression and violence in their homelands.""
Campbell responded on the same day, stating: “The opinions Mr. Johnston expresses on Twitter are his individual views and do not represent the position of Campbell Soup Company."
Also last week, Keith McLoughlin, Campbell’s interim president and CEO, responded to a letter of complaint from Open Society about Johnston’s tweet. McLoughlin wrote that Campbell “believes in truth and transparency” and expects its leaders “to present facts, to deal with objective truths and to exercise judgment,” adding that Johnston’s comments on his personal Twitter account “do not represent the position of Campbell and are inconsistent with how Campbell approaches public debate.”
McLoughlin also wrote that Johnston “has represented us ably for many years." He stated that Johnston had in August informed the company “of his plans to depart Campbell in early November, and we will continue on that timeline. We regret that the episode happened and has colored his service to us.”
Calls to boycott Campbell Soup and all of the company’s brands began almost immediately. Meanwhile, news broke that a bomb had been delivered to Soros’ home on Oct. 22 — the first of 14 bombs (identified to date) allegedly sent to CNN and critics of President Trump by Cesar Sayoc.
The context — “The conspiracy theories about Mr. Soros have been spread against a backdrop of increasing hostility toward Jews in the United States,” noted The New York Times, in reporting on the Johnston controversy — grew even darker on Oct. 27, after a man who told police that he “wanted all Jews to die” killed 11 worshippers in a Pittsburgh synagogue.
Yesterday, Campbell Soup confirmed that Johnston was no longer with the company, and that his last day was Oct. 25. Campbell explained that in the last few days, “the company and Mr. Johnston agreed that under the current circumstances it would be best to accelerate the timing of his departure.”
Johnston had been with Campbell for 16 years, handling the company’s lobbying of the government on trade and agricultural matters, as well as its trade association relationships. He had previously served as secretary of the Senate under then-Senate Majority Leader Robert Dole (R), in several administrative positions with the Republican Party, and as a communications executive for the National Food Processors Association, reported The Washington Post.
The unexpected political controversy landed just as an ugly proxy fight between Campbell’s current board and activist investor Daniel Loeb got even uglier. Loeb’s hedge fund, Third Point, LLC, sued Campbell last Thursday (the same day that Johnston was heading out the door), claiming that current board members have been misleading shareholders by asking them for their proxy vote without offering sufficient specifics about the company’s strategic review.
Campbell said it is “vigorously contesting” the suit.
Each side in the battle "has cited support from members of the company's founding family," and "both say they know what's best for Campbell Soup, which has faced a slew of problems, including poor sales, an ill-fated acquisition and the abrupt departure of its CEO this year," sums up CNN Business. "Loeb wants the current leadership out, but Campbell's says Loeb is inexperienced in the world of soup, and that they know how to turn things around.”
While the Johnston controversy may end up as a mere footnote to the outcome of the fate of the nearly 150-year-old company, boycott threats and potential brand damage are hardly going to be assets for current management at the company's annual meeting, scheduled for Nov. 29.
And given the current divisiveness in the country, some consumers may hold a grudge toward the company and its brands regardless of who ends up owning or running it.
Patrick Gaspard, president of Open Society, maintains that Campbell hasn’t responded sufficiently to Johnston's tweets. Politico reported that, in a follow-up letter to top Campbell executives, Gaspard asserted that Johnston's claims "add to a toxicity in our communities and contribute to inciting hate and quite possibly violence," and that "Campbell’s has a responsibility to condemn these 'views' with the force of the moral suasion your brand has accumulated over decades of patronage from those of us who believe in good corporate citizenship."