Lobby Giant Is Scandal Casualty
Tuesday, January 10, 2006
One of Washington's top lobbying operations will shut down at the end of the month because of its ties to disgraced lobbyist Jack Abramoff and former House majority leader Tom DeLay.
Alexander Strategy Group, which had thrived since its founding in 1998 thanks largely to its close connections to DeLay (R-Tex.), will cease to operate except for a relatively small business-development division, Edwin A. Buckham, the former top DeLay aide who owns the company, said yesterday.
Buckham said in a telephone interview that the company was fatally damaged by publicity about the ongoing federal investigation into the affairs of Abramoff, who pleaded guilty last week to fraud and conspiracy charges. Abramoff is cooperating with prosecutors in their probe of congressional corruption.
DeLay was indicted in Texas last year on money laundering and other charges. He is one of several lawmakers under scrutiny in the Abramoff case, sources knowledgeable about the investigation have said.
"Reports in the press have made it difficult to continue as a lobbying/political entity," Buckham said.
Buckham's firm employed DeLay's wife, Christine, for four years. It also benefited by working closely with Abramoff. Abramoff's plea agreement mentioned his close ties to Tony C. Rudy, one of Buckham's colleagues at ASG, identified in the court papers as "Staffer A."
Rudy, a former DeLay aide, worked for Abramoff before joining ASG. According to the plea document, a political consulting firm run by Rudy's wife allegedly received $50,000 in exchange for official actions Rudy took while working for DeLay.
A senior ASG employee, who spoke on the condition of anonymity because of the sensitivity of ongoing discussions at the firm, said Rudy will be leaving the company. Rudy did not return phone calls yesterday.
The firm's collapse also coincides with DeLay's announcement that he will not attempt to regain his former post as House majority leader. DeLay has been indicted on money-laundering charges in his home state and, by House rule, had to give up his leadership position, at least temporarily.
The end of DeLay's leadership role was a major blow to the lobbying firm. Former DeLay associates have said that ASG and Buckham were key gatekeepers for DeLay with outsiders including lobbyists and their corporate clients. DeLay's fall from power presaged a major commercial loss for the company whether it dissolved or not.
The senior ASG employee estimated that 40 to 50 percent of the firm's clients probably would have abandoned the firm soon because of adverse publicity about the continuing investigations involving Rudy and Buckham.
Buckham said that he will be leaving the lobbying business and hasn't any regrets. "I'm at peace with all this," he said. "I'm not bitter. I'm not resentful. I harbor no ill feelings toward anyone. The important thing in life is having a clean heart and I do. I'm not even upset with the press."
ASG, based in Georgetown, lobbies for an A-list of about 70 companies and organizations, including Fannie Mae, Freddie Mac, Microsoft, and the Pharmaceutical Research and Manufacturers of America. ASG ranked No. 21 on National Journal's 2005 lobbying list with $8 million in revenue, a 34 percent jump over the previous year.
The 12 lobbyists who now work at ASG -- other than Rudy and Buckham -- intend to start a successor firm and intend to keep as many of the clients as possible, according to one of the lobbyists.
Financial disclosure forms show that ASG employed Christine DeLay from 1998 to 2002. Lobby filings also show that Buckham hired Julie Doolittle, wife of Rep. John T. Doolittle (R-Calif.), to do bookkeeping for a nonprofit group he created called the Korea-U.S. Exchange Council. A year ago, Julie Doolittle and her firm received a subpoena from the grand jury investigating Abramoff, according to her lawyer.
Former lobbying associates have said that Abramoff shared some high-paying clients with ASG, including Malaysian interests, the Mississippi Choctaw Indian tribe and online gambling firms. Federal investigators have questioned some former Abramoff associates about whether those referrals were related to Christine DeLay's employment there, sources said.
The Post reported in November that a federal task force was investigating Abramoff's connections to ASG and its hiring of congressional wives.
In court papers filed with Abramoff's plea, prosecutors said that Abramoff sought Rudy's help in killing a bill to prohibit gambling on the Internet. Rudy went on two luxury trips with the lobbyist, including one partly paid for by Abramoff's client, eLottery Inc., a gambling services company. Abramoff also arranged for eLottery to pay $25,000 to a Jewish foundation that hired Rudy's wife as a consultant, according to documents and interviews. Months later, Abramoff also hired Rudy as a lobbyist.
Abramoff and others looked to Rudy to help scuttle a postal rate increase, the court documents said. The Magazine Publishers of America, which had hired Abramoff in 2000 for a campaign against the increase, told The Post last week that it paid $25,000 to the same Seattle foundation. A spokesman for the publishers group, Howard J. Rubenstein, said its directors "had absolutely no knowledge of how the money would be used."