The masters of news spin do it without appearing obvious. That’s a lesson AOL could learn based on its glaringly self-serving response to a new report from investor advisory group Glass Lewis in the run-up to a bitter June 14 proxy fight. The firm recommended that AOL shareholders elect Starboard Value’s Jeffrey Smith to the board, but not the other two members of his dissident slate. It’s a clear setback for AOL, which is fighting the hedge fund CEO who controls 5.3% of the voting shares. Glass Lewis says that AOL’s board “would benefit from a fresh perspective”, adding that Smith’s pressure has already led the company to take actions that boosted the stock price — including the $1.1B sale of AOL’s patent portfolio to Microsoft. Glass Lewis disputes AOL’s claim that Smith would upend its strategy and destroy shareholder value. AOL’s attacks on Starboard Value are “indicative of a retrenched board unprepared to substantially alter the status quo or consider alternative strategies in the absence of significant external pressure,” the report says.

But AOL strains credulity by characterizing this critical report as an endorsement of the company-backed board candidates. “The Glass Lewis rejection of Starboard’s full slate reinforces our belief that our director nominees have the qualifications necessary to most effectively lead AOL and to further enhance stockholder value,” AOL says. Its opinion of Glass Lewis abruptly changes when it comes to the recommendation to vote for Smith. That analysis “is flawed,” AOL says. “Starboard’s distracting and misleading proxy campaign, led by Mr. Smith, furthers our belief that Mr. Smith’s interests are not aligned with the interests of all stockholders.  If elected, we strongly believe that Mr. Smith would impede a strategy that we believe is clearly working.” The Glass Lewis report follows a recommendation from ISS for shareholders to support Smith and one of his allies, Dennis Miller. Another investor advisory firm, Egan-Jones, recently supported AOL’s eight candidates.