Burson-Marsteller is perhaps the premier, old-line brand name in all of PR. Its founder, the grandfatherly Harold Burson, is still around, and has assumed a position as the Grand Old Man of the PR industry. His kindly demeanor doesn't mean that the firm doesn't have just as many unsavory clients in its past as all the other major PR agencies, including the obligatory millions of dollars worth of work on behalf of the tobacco industry.
Penn got the job as Burson's CEO in late 2005, and was a surprising choice. He'd never run a PR firm like Burson before, and didn't have any particular reputation as a great manager. Do you think the company had one eye on the 2008 elections when they picked Penn? Of course. Can you imagine the value of the halo effect Penn would have on a firm like Burson—which does plenty of political and lobbying work—if Hillary were to get elected, even if Penn resigned from the agency to work in the White House?
It's a moot point now. Clinton should have insisted from the beginning that Penn resign his job with Burson in order to work on the campaign. The very idea that he could do both at once, without Burson deriving a great deal of unseemly influence from his position, is insulting to the intelligence of everyone. He, and Clinton, were rightly criticized every time Burson handled a high profile controversial client, like mortgage disaster Countrywide or private paramilitary firm Blackwater. The argument that Penn could simply recuse himself from working on such clients is a canard—he is the face of his firm, and his connection to Clinton can remain totally unspoken in new business meetings, while still doing its silent part to draw in clients hoping to capitalize on it.
For a while, Penn was talked up as the Democratic version of Karl Rove. That's not something to which any Democrat should aspire, but it turned out to be a moot point as well—Rove's work for Bush was politically superior to Penn's work for Clinton. And if she loses in her bid for the presidential nomination, not only will Penn's reputation as a political savant suffer, but Burson will have to ask itself whether they really want him running the firm if his direct line to the White House, which was his greatest potential selling point, fails to materialize.
If there's any lesson in all this, it's that there should be a solid divide between politicians, who espouse ideals, and the PR industry, which is definitively one big amoral hired gun. Having a PR consultant is one thing; turning your entire campaign over to a man who is also working as a rainmaker for one of the most high-powered PR firms in the world is quite another. The fact that the Colombian government—which gave Burson the contract that got Penn dropped from the campaign—then summarily fired the firm because of Penn's "lack of respect" as he tried to apologize for meeting them is all the illustration necessary of the fundamental incompatibility of his two roles.