In an odd move for someone so politically connected Frances F. Townsend joined game maker Activision Blizzard in March 2021 as Chief Compliance Officer, Corporate Secretary and Executive Vice President of Corporate Affairs.
Townsend remains on the Council for Foreign Relations, the Trilateral Commission and sits on the boards of Freeport McMoran, Chubb Ltd. and Investcorp.
California's Department of Fair Employment and Housing brought a lawsuit against the company for. gender pay discrimination and allowing ongoing sexual harassment complaints to go unresolved.
Townsend's risk management response of denying all accusations did not go over well with employees, referred to as "everyone." Many workers planned to walkout today.
The walkout comes after more than 2,000 current and former Activision Blizzard employees signed an open letter to management regarding the lawsuit from the state of California.
Harmed employees expect leadership to repent (turn around) after the lawsuit, not deny the charges and discount those injured.
Many corporate compliance programs are an exercise in legal defense and used to identify problem employees that need to be nudged out the door. The income earning franchise of top executives and board members must be protected. That is world Fran Townsend swam in for the last decade.
Townsend wrote the Lessons Learned report after Hurricane Katrina and protected The Carlyle Group's LifeCare Hospitals and Tenet Healthcare. Together they had 35 patient deaths in Memorial Medical Center in Katrina's aftermath.
Who omitted the hospital with the highest death toll in the aftermath of Hurricane Katrina from the Bush White House Lessons Learned Report? Frances Townsend. The Carlyle Group, a private equity underwriter (PEU), owned Lifecare Hospitals, which was responsible for 25 patients deaths. Ten other people perished under Tenet Healthcare's umbrella. Fran successfully managed these two companies' risk with her vacuous collection of hero stories and "we can do betters."
Tenet Healthcare's lobbyists visited the White House several times while Fran's "researched" her report. Jeb Bush joined the Tenet Healthcare Board of Directors a year after brother W.'s White House foisted Fran's whitewash on the public.
Frances Townsend has been richly rewarded for putting corporate loyalty above public service. President George W. Bush refused to release e-mails from Townsend, Andy Card, Joe Hagin and others involved in his hapless Hurricane Katrina response. I imagine those e-mails are buried under legal protection, "state secrets" or otherwise.
The public has no right to know how insiders protect and enrich each other as they dance between public service, private equity underwriters (PEU) and government front groups.
Reports written to minimize corporate liability are not inspiring to harmed employees. Activision Blizzard learned that lesson very quickly.
Oddly, the company hired Wilmer-Hale, the law firm that defended BP for their Gulf Oil Spew. They did not offer Jamie Gorelick, the Queen of Crisis Management. Instead they selected the former enforcement head of the SEC.
The WilmerHale team will be led by Stephanie Avakian, who is a member of the management team at WilmerHale and was most recently the Director of the United States Securities and Exchange Commission’s Division of Enforcement.
The SEC is one of many compromised federal agencies. Hiring a toothless former regulator should be less than inspiring to aggrieved workers. WilmerHale had this to say when she rejoined the fold in February 2021.
Stephanie is returning to a practice that she helped lead as the vice chair based in New York before she left the firm in 2014 to become the SEC’s Deputy Director of Enforcement. She will lead one of the nation’s premier groups of lawyers in counseling and defending financial institutions, public and private companies, hedge funds, accounting firms, investment advisors, boards, corporate executives, and individuals facing regulatory and criminal investigations and litigation with the government.
Activision's CEO wrote a letter to employees. One line stated:
"There is no place anywhere at our Company for discrimination, harassment, or unequal treatment of any kind."
There is vast unequal treatment between the executive and worker class in terms of pay and benefits.
"To put it clearly and unequivocally, our value as employees are not accurately reflected in the words and actions of our leadership," employees said in the petition.
Fran has a way of finding the hot seat in her repeatedly defending the indefensible. It's a pattern.
Update 8-2-21: The SEC fined Bausch Health (Valeant Pharmaceuticals) $45 million and left the door open for executives to repeat their improper actions at another company. Investors have a $3 billion lawsuit against the company. Bloomberg noted:
Formerly known as Valeant Pharmaceuticals International Inc., Bausch Health previously settled claims for $1.21 billion that it misled investors about the company’s financial performance. In several related lawsuits, investors accused Valeant of deceptive business practices, including price gouging and a kickback scheme that led to the conviction of a former executive on bribery charges in 2018.
After being enforced by the DOJ Columbia HCA's Rick Scott became a U.S. Senator for the state of Florida.
Circle the legal wagons, wait out and water down the regulators. Then resume getting one's part of the financial and power pie.
Update 8-3-21: FT reported the resignation of Blizzard Entertainment President J. Allen Brack. It stayed away from directly naming Fran Townsend in this statement:
Activision Blizzard’s initial reaction to the lawsuit dismissed it as “irresponsible behaviour from unaccountable state bureaucrats” who had “rushed to file an inaccurate complaint”. The company’s chief compliance officer said in an internal memo that the case “presented a distorted and untrue picture of our company, including factually incorrect, old and out of context stories”.
Fran's memo inspired a walkout at Activision Blizzard which resulted in Brack's resignation. Townsend's job got harder with a shareholder lawsuit citing executives' failure to disclose the California state investigation in SEC filings.
An Activision Blizzard employee group rejected the hiring of WilmerHale and Stephanie Avakian. Their letter citing Avakian's history of protecting the wealthy and powerful. They added Frances Townsend's connections to the law firm.
A colleague commented on Townsend's representation on the Council for Foreign Relations and the Trilateral Commission. They said "Churches must shake when she drives by."
Update 8-6-21: Fran avoids direct naming in most stories on Activision's employee harassment:
Activision Blizzard’s initial response to the lawsuit was tragic, with one leader calling the allegations meritless and distorted.
The tragic response came from Frances Townsend.
Update 8-8-21: Townsend resigned from her role as executive sponsor of Activision Blizzard King's Women's Network. She remains an executive for the company.
Townsend told employees over Zoom that her statement was following “legal counsel’s guidance on language, and that the end result no longer sounded much like her voice[.]”
Despite claiming the statement was not her voice, Townsend was criticized again for tweeting a link to an article titled, “The Problem With Whistleblowing,” on her personal social media account. The article which calls out whistleblowers was seen as inappropriate given many current and former Blizzard employees were sharing stories of their abuse online or to the press.
After being criticized for her tweet, Townsend seemingly began blocking Blizzard employees and journalists (myself, included) before deactivating her Twitter account altogether.
Fran also serves on the Leadership Council for Concordia, the Red Team's attempt to emulate the Clinton Global Initiative. It was started by two politically connected college grads, now Concordia's board chair and CEO.
Update 11-22-21: The CEO "knew of sexual harassment and rape claims at the gaming giant but failed to report some of them to the board." The article did not say what role, if any, Fran Townsend played.