Wendell Potter is the health insurance industry’s worst nightmare.

Until his resignation in 2008, he was chief of public relations at CIGNA, one of the biggest health insurance companies. He has written a book that blows wide open the insurance industry’s propaganda campaign against all threats—from health care reform to aggrieved customers to Michael Moore, whose documentary Sicko was an empathic attack on U.S. health care. Potter’s book is Deadly Spin, which was published by Bloomsbury Press last month, and, as the name implies, it has two themes: corporate spinmanship and insurance-industry efforts to undermine President Obama’s health care plan.

To me, what made this book fascinating was that it explores something that doesn’t come under the magnifying glass very often: a high-powered corporate PR apparatus viewed from the inside.

Among his damming revelations:

• The insurance industry manipulated President Obama and the media into thinking that the insurance industry had “shifted sides” and was now working in cooperation with the government in fashioning a health care plan, when it was actually working to undermine the plan at every turn. Referring to a congressman’s rant that the ranks of the uninsured include “millions of illegal immigrants,” Potter reflected, “I knew exactly where he got his talking points: from me.”
• That was no accident. He contends that the insurance industry used “third parties,” such as sympathetic congressmen, “to kill key elements of the president’s plan, if not all of it, by scaring and lying to the public.”
• The insurance industry engaged in a sustained attempt to discredit Michael Moore and his film Sicko. That included creation of a front group called Health Care America, financed by the health insurers, for the sole purpose of attacking him. The group spent hundreds of thousands of dollars, paid for by insurance customers, to demonize the film. Yet Potter, who helped coordinate these efforts, actually felt at the time that Moore “got it right,” that his film at times moved him to tears, and that the horror stories depicted in the film were actually a “common occurrence.”

To me, what sets this book apart is that it is one of the few volumes that examine ethical shortcomings of American public relations. Not all PR, to be sure, but enough that I hope this book results in soul-searching for PR people and the media.

Potter reviews the history of spin, which he traces back to the Potemkin villages of Catherine the Great. Modern PR was greatly influenced by Edward Bernays, author of the 1923 book Crystallizing Public Opinion, the first book entirely dedicated to PR. Among his clients were the cigarette companies, for whom he orchestrated a campaign equating cigarettes with “thinness, grace, and beauty.” An insufficient number of women were smoking, so he began an early project, secretly financed by a tobacco company, to encourage women to smoke.

Not much has changed today. While PR tactics can benefit society, Potter writes, “PR tactics are also used to create subversive front groups, discredit legitimate individuals or organizations, spread false information, distort the truth, and instill fear.” In the recent debate on health care, he argues, “we saw PR used to leverage fear so effectively that it convinced a good number of people to argue against their own best interests.”

Part of the problem, he points out, is that though there are ethical standards in the public relations business, adhered to by many if not most PR people, “there is no law to prevent any of them from violating the ethics of the profession.’ And there probably should be no law, I would imagine, given the First Amendment. So we have repeated examples of PR ethical obtuseness, such as the instance back in 2006 that Wendell cites. In that case, a leading PR firm created a phony blog to promote the interests of Wal-Mart. It worked, until the scheme was exposed by BusinessWeek.

Late in life, Bernays expressed regret about his effort to promote cigarettes and urged PR professionals to police their ranks. “There are no standards,” he said. And, perhaps, there still aren’t.

But who is to blame for that? At bottom, it’s my colleagues in the media. It’s our job to distinguish between front groups and real ones and to resist the lures of PR spin. “PR people cultivate reporters, ostensibly for friendship or mutual benefit, but more realistically for manipulation,” Potter writes. “And in a disturbing trend, reporters can increasingly be cowed by powerful public relations reps because PR controls access to major news-makers in both business and government.”

The problem is getting worse, he points out, as news outlets lose advertising dollars, de-emphasize investigative reporting, and become “increasingly dependent on public relations departments and agencies for content.” It’s a sentiment that has been expressed before, but is especially refreshing coming from a former PR practitioner who has seen his profession at its worst.

Potter’s startling and important book has gotten some attention since it was published last month, but hasn’t been reviewed by as many major news outlets as I’d have expected. That’s too bad, because this book is more than just one PR man’s tell-all book about the insurance industry. It’s a wake-up call.