Partisan K Streeters Scramble After Party Shift
By Bennett Roth
The new era of divided government is providing challenges and opportunities for one-party lobbying shops, which have marketed themselves as providing access to party leaders as well as keener insight into their political thinking and strategy.
But such shops are also subject to the swings of the election cycle and are forced to scramble for clients when their party loses control of a chamber or branch of government. They must compete with bigger bipartisan firms that sell themselves as better equipped to respond to clients’ needs no matter what the political makeup of Congress.
With businesses and trade associations now deciding who will lobby for them next year, such one-party shops are readjusting strategy and expectations for the coming year. In a reversal of roles, Democratic firms that threw business to GOP outfits may now find themselves more reliant on the kindness of their Republican partners.
Firms that are largely Republican and went through lean times when Democrats were in total control of the government say they are already experiencing an uptick in business. From 2007 to 2009, BGR Group saw its lobbying revenue drop from $147.6 million to $92.8 million.
But this year the firm has already signed 40 new clients, according to Loren Monroe, who leads BGR’s appropriations and state and local government affairs practice.
Monroe said many of the companies and associations signed up because they wanted stronger advocates to deal with legislation being considered on Capitol Hill, such as health care and financial reform.
The same is true for three veteran Republican lobbyists who left Ogilvy Government Relations earlier this year to form their own firm, Crossroads Strategies.
“Certainly people have been eager to take our phone calls,” said Stewart Hall, one of the new firm’s partners. The Crossroads client list already includes the National Rifle Association, Verizon and AT&T.
Andrew Shore opened his GOP lobbying shop in 2007, which he conceded was probably not the ideal time for a Republican to go into business. But like so many one-party shops, Jochum Shore & Trossevin weathered the lean times by partnering with Democratic firms.
With Republicans back in charge in the House, the prospects for Shore’s firm may be on the upswing.
“You are at the front end of opportunities instead of being carried on the back of benevolent Democratic friends,” Shore said.
Heather Podesta, part of a Democratic power couple whose firm’s revenue doubled from 2007 to 2009 when her party was on the ascendency in Washington, D.C., helped Shore’s firm obtain business. As is the case with many one-party operations, Podesta often partners with a Republican shop to offer clients a bipartisan team to work both sides of the aisle.
Shore said he would return the favor if he is now in a better position to nab clients.
“I hope to pay her back for her kindness,” he said.
Podesta told Roll Call that she didn’t expect the growth rate for her firm to continue in the coming session as it has in the past several years, when there was a pent-up demand for Democratic lobbyists.
Podesta, who is married to fellow lobbyist Tony Podesta and who is close to Speaker Nancy Pelosi (D-Calif.), said this is the time of year that clients are re-evaluating their government relations teams. Despite the altered political landscape, Podesta said she does not plan to hire Republicans, saying she asked her staff after the elections whether they wanted to change the political composition of the firm.
“Everyone liked being a Democratic firm,” she said. But Podesta said the firm will tinker with its strategy, spending more time working with clients and House Democrats to implement their agenda through lobbying the federal agencies.
“You will work with them in a different way,” she said.
Hall of Crossroads Strategies said prospective clients are eager to make inroads with the large number of incoming Republican freshmen who are “unfamiliar quantities.”
“This bodes well for Republicans in this business,” he said.
Some firms that are either all Democrats or have a Democratic reputation are adjusting the way they do business to deal with the changed makeup on Capitol Hill.
For Democratic lobbyists, much of the action will move to the Senate, where the party is still in control, although by a smaller margin.
In a nod to that shift, Steve Elmendorf, a Democratic lobbyist and former aide to House Democratic leader Dick Gephardt (Mo.), recently elevated Jimmy Ryan, a former chief counsel to Senate Majority Leader Harry Reid (D-Nev.), to partner.
The announcement that Ryan would be sharing the firm’s name with Elmendorf came less than a week after the elections. Elmendorf said the promotion was in the works for some time but added that, “when I hired him, I wanted a Senate counterpart to me.”
Elmendorf thinks his firm is “well positioned” to work not only with the Senate but with the Democratic White House.
The Raben Group, another Democratic firm, also beefed up its staff by hiring a former White House aide, Alaina Beverly, the ex-associate director of the office of urban affairs.
Mark Glaze, a principal at the Raben Group, left some wiggle room for the firm to diversify its staff politically.
“We’re not opposed to hiring a Republican,” he said.
Even though Tony Podesta’s separate firm, the Podesta Group, has a bipartisan staff, it has benefited in the past few years from his Democratic credentials. The firm’s revenue increased to $307 million in 2009 from $224.4 million in 2007.
But recently the Podesta Group has also beefed up its Republican side, hiring a number of GOP staffers, including Michael Quaranta, the former chief of staff to Rep. Mike Castle (Del.), who is retiring after losing his primary bid for Senator. In a release that was embargoed until Election Day, the firm announced Quaranta’s hiring with the headline, “Podesta Group Adds Republican Muscle to Bipartisan Team.”
Tony Podesta, however, denied the timing of the announcement of the hiring was a deliberate attempt to curry favor with Republicans.
“I didn’t write the press release,” he said. Quaranta’s hire wasn’t about filling a Republican quota, he added.
Tony Podesta acknowledged the firm has a Democratic reputation because of his political activity; he gave the maximum contributions allowed in the 2010 election cycle to Democrats. He has also been a frequent White House visitor.
But he said the firm’s senior staff is equally divided between Democrats and Republicans.
He said a bipartisan team will be necessary even in the House, where he said the minority party cannot be ignored.
“Those who erase all the phone numbers of Democrats in the House are shortsighted,” he said. “On some issues they will be important.”
Source: Roll Call, December 1, 2010