Jill Kelley Retains High Profile Crisis Manager, Despite Reportedly Being In Debt

Crisis managers say clients in high profile cases where reputations are at stake often don't pay for services.

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Jill Kelley looks out the window of her home in Tampa, Fla. Gen. David Petraeus is seen on the television in the background.

The scandal that began on Nov. 9 after CIA Director David Petraeus admitted an extramarital affair with his biographer continues to unfold this week, as those involved retain powerful lawyers, crisis managers and other experts needed to fix their potentially damaged reputations.

Among the most intriguing personalities of those involved appears to be Jill Kelley, the socialite and unpaid social liaison to MacDill Air Force Base whose E-Mails with Gen. John Allen may threaten his career. It was Kelley's complaint to the FBI about threatening E-Mails from Petraeus's biographer, Paula Broadwell, that kicked off the investigation.

Kelley reportedly lives a lavish lifestyle in Tampa, Fla., yet is deeply in debt. USA Today reports that she faces a number of lawsuits for credit card debts and foreclosures, many of which remain unresolved. E-Mails obtained by ABC News suggest Kelley may have tried to make up some of that debt, having eagerly tried to secure a multi-billion dollar Korean business deal earlier this year. The deal never went through.

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Yet Kelley has just hired Abbe D. Lowell, a prominent Washington white-collar defense lawyer, the same lawyer who defended former North Carolina Senator John Edwards during his own extramarital scandal. According to the New York Times, Lowell has also brought onto Kelley's case crisis management extraordinaire Judy Smith, whose career is the inspiration for the hit TV show Scandal.

Jill Kelley looks out the window of her home in Tampa, Fla. Gen. David Petraeus is seen on the television in the background.

But it is unclear how Kelley could afford both Lowell and Smith. Regions Bank reportedly brought a $1.8 million foreclosure lawsuit against Kelley and her husband in 2010, the same year Bank of America sued them for $25,000 in unpaid credit card charges. USA Today reports that the Kelleys were sued by Central Bank in 2010, and reportedly owed the bank almost $2.2 million. According to Politico, the Kelleys have been the subject of nine lawsuits in recent years.

An E-mail to Smith was not returned, and Lowell did not respond to request for comment. But according to crisis manager Jonathan Bernstein, fees for someone like Smith range from $300 - $800 per hour. Another crisis manager estimates that Smith would charge a minimum of tens of thousands of dollars a month.

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"But all of us have the ability to flex our fees if a situation moves our heart to do so," says Bernstein.

Eric Dezenhall, CEO of crisis management firm Dezenhall Resources, says another scenario is that clients in high-profile cases sometimes just don't pay.

"This is a classic situation. People with no money hire a high-profile crisis manager, and [the manager] gets stiffed," he says. "The lawyers and crisis managers are never able to deliver on what the clients expect, so there is the inevitability that the client will be unhappy with the services rendered. And then the client doesn't pay."

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When this happens, crisis managers usually do not speak out about it, says Dezenhall, because it doesn't serve their interests to develop a reputation of not getting paid.

Scott Sobel, president of the public relations and crisis management firm Media and Communications Strategies, suggests a third possibility for Kelley. Sobel says lawyers and crisis managers known for this kind of work often work out a special deal with the client.

"They will take these cases on contingency, or they may be countersue, or they may take it on in the hope and realization that their profile will be increased," he says. "It's an advertising investment."

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Whatever Kelley is paying Lowell and Smith, crisis managers say a lot of work lies ahead of them.

Bernstein, who wrote the Manager's Guide to Crisis Management and Keeping the Wolves at Bay says it's "going to take a long time to sort out who actually did wrong" beyond Gen. Petraeus and Broadwell. Kelley and her sister, he says, need to remember that if they do anything to obfuscate the truth about themselves or the situation, the public will "interpret it as a lie."

Sobel agrees, saying the information not yet revealed may end up being the most salient to the case. "It's the proverbial 'devil in the details,'" he says.

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  • Elizabeth Flock is a staff writer for U.S. News & World Report. You can follow her on Twitter or Facebook or reach her at eflock@usnews.com.