The Power Player
How the Rise of One Lobbying Firm Helped Transform the Way Washington Works

By Robert G. Kaiser
Washington Post Staff Writer
Sunday, March 4, 2007

* This article is part of a special online report.

For Gerald Sylvester Joseph Cassidy, creator and proprietor of the most lucrative lobbying firm in Washington, May 17, 2005, was a day to exult. That bright, clear spring Tuesday marked the 30th birthday of Cassidy & Associates, and an impressive crowd had come to pay tribute to a godfather of the influence business.

Hundreds of guests gathered on the rooftop terrace of a handsome new office building at the foot of Capitol Hill, 13 stories above Constitution Avenue. A vivid orange sun descended gently behind the Washington Monument and the Lincoln Memorial at the western end of the Mall, casting angular beams of light across the assembled throng. The guests' view from the roof was filled by the United States Capitol, which from this startling vantage point could be seen, from end to end, in a single field of vision. The Capitol looked contained and compact, almost a plaything within easy reach.

As the setting sun illuminated the scene, the party illuminated a new Washington -- a capital transformed by big money in the 30 years since Cassidy became a lobbyist. This new Washington operated on new ethical norms, embraced new standards of risk and reward and offered tempting new career choices for former officials, members of Congress, their spouses and their aides.

Cassidy helped invent the new Washington, which had made him seriously rich. His personal fortune exceeded $125 million. He and his original partner, whom he forced out of the firm 20 years earlier, devised a new kind of business, subsequently mimicked by many others. Their innovation was the first modern "earmarked appropriations" -- federal funds directed by Congress to both public and private institutions when no federal agency had proposed spending the money. Over the subsequent three decades, the government dispensed billions of dollars in "earmarks," and lobbying for such appropriations became a booming Washington industry.

Cassidy may be the richest Washington lobbyist, but he is far from the best-known. Since a scandal erupted that bears his name, that title belongs to Jack Abramoff, the confessed felon, bribe-payer and tax evader who is now an inmate in the federal prison camp in Cumberland, Md. He is still cooperating in a widening federal probe of corruption on Capitol Hill.

Abramoff's brazen behavior fit a stereotypical caricature of the Washington lobbyist as a willful rogue eager to corrupt members of Congress. The Abramoff story is a crude pulp thriller punctuated by free dinners, lavish golfing outings, big campaign contributions, arm-twisting and old-fashioned bribery.

Cassidy's is a subtler epic that probably reveals more about the culture of Washington, D.C. It, too, involves favors, gifts and contributions, but they are supplemented by the disciplined application of intellect, hard work, salesmanship and connections. In Cassidy's story, all these can influence the decisions of government to the benefit of private parties -- Cassidy's clients.

A Gatsbyesque Affair

Charlie Palmer Steak, the gleaming Washington outpost of a famous Las Vegas restaurant, had catered Cassidy's party. Restaurant staff circulated with platters of miniature hamburgers and tartlets of goat cheese and mushrooms. The restaurant occupies much of the ground floor of the building at 101 Constitution Ave., where the rooftop party was held. One of the restaurant's owners is the same Gerald Cassidy, a man of many investments.

He had turned 65 a month before the party, and he looked spiffing. His full beard of uniformly short whiskers was trimmed to a triangle of white. His fullback's frame was perfectly draped in a dark gray, double-breasted and pin-striped suit made by Alan Flusser in New York, Cassidy's home town. Flusser's custom suits start at $3,800. A white shirt with French cuffs and a silk tie in a pattern of black and white checks completed the ensemble. The checked tie set against the suit's prominent pin stripes evoked a Las Vegas defense attorney.

The outfit advertised the distance Cassidy had come from his difficult childhood in a troubled Irish American family. None of its other members, denizens of Brooklyn and Queens, wore custom-made suits; none had even graduated from college before Cassidy did in 1963. Cassidy's memories of his youth are short on nostalgia, long on deprivation. "I remember evictions, repossessions, things you never forget." Jack Cassidy, his stepfather, was a pugnacious Navy veteran and former boxer who sometimes threw a punch at his son.

At his big party Cassidy's shyness was displaced by pride; he was virtually preening. He presided with a certain dignified formality, greeting guests with a warm smile but never slipping out of character. Like Gatsby, F. Scott Fitzgerald's self-invented tycoon, Cassidy seemed to enjoy the idea of the party at least as much as the party itself.

Gatsby sought riches to reclaim a lost love who had rejected him when he was young and poor; Cassidy, too, sought riches as armor against poverty and rejection. Both were dreamers who would be forced by circumstances to become realists.

For Cassidy, the urge to accumulate money drove him to succeed. "I'm a big fan of financial security," he said in one of numerous extended interviews. "I didn't have a lot of it as a kid, so I wanted to be successful and financially secure." He never pretended not to be interested in money nor tried to deny who he was or how he made his cash. He proudly, though quietly, made large donations to numerous charities.

His candor about his business and his pursuit of wealth set him apart from the most successful lobbyists of earlier generations, who often were reticent about their trade. Washington powerbroker Clark Clifford was a good example; he never registered as a lobbyist and would deny heatedly that he was one, even as he helped his law firm's corporate clients solve problems in Washington for handsome fees. Clifford wanted to be known as an elder statesman.

Cassidy made no bones about his work. He liked to talk about his ability to get things done: winning hundreds of millions in federal dollars for his university clients, getting Ocean Spray Cranberry juice into school lunches, helping General Dynamics save the billion-dollar Seawolf submarine, smoothing the way for the president of Taiwan to make a speech at Cornell despite a U.S. ban on such visits.

Cassidy's career has spanned an astounding boom in the lobbying business. When Cassidy became a lobbyist in 1975, the total revenue of Washington lobbyists was less than $100 million a year. In 2006 the fees paid to registered lobbyists surpassed $2.5 billion; the Cassidy firm's 51 lobbyists earned about $29 million. In 1975 the rare hiring of a former member of Congress as a lobbyist made eyebrows rise. Today 200 former members of the House and Senate are registered lobbyists. Two of them, tall, gregarious men named Marty Russo and Jack Quinn, work for Cassidy, and at the 30th birthday party they worked the crowd with relish.

The business involves giving as well as receiving. As lobbying became more and more lucrative, Cassidy realized that members of Congress who helped his clients could be thanked with campaign contributions. "You can't be in this business and not give," he once explained.

Starting with McGovern

The party crowd looked like a typical A-List Washington gathering, sprinkled with past and present senators, House members and Washington hangers-on of many varieties. But there was a story up on the roof that evening that wasn't obvious to most of the guests -- the story of Gerry Cassidy's remarkable career.

The crowd included figures from every stage of Cassidy's life in Washington, beginning with George McGovern.

The long-retired Senator and 1972 Democratic presidential nominee had flown in from South Dakota to toast Cassidy, whom he had first met 36 years earlier in Immokalee, Fla., when McGovern chaired the Senate Select Committee on Nutrition and Human Needs.

In 1969, Cassidy, then a young legal aid lawyer for migrant workers, helped McGovern's staff organize hearings in Immokalee on hunger among those workers. Cassidy then escorted the senator around one of the most impoverished areas in the United States. The hearings drew extensive television and newspaper coverage, one of McGovern's first moments in a national spotlight. Just two months later, Cassidy made his way to Washington and knocked on the nutrition committee's door. Could he have a job? In April 1969, Gerry Cassidy arrived in the nation's capital to join the staff of McGovern's committee. He has been here ever since.

When Cassidy moved up from Florida, he and Loretta rented a small apartment in Arlington. Today, they own grand houses in McLean and on the Eastern Shore and a condo on Key West.

Cassidy and McGovern have maintained friendly if not close relations over the years -- a typical pattern for Cassidy, who has many acquaintances but few real friends. McGovern expresses personal amazement at Cassidy's financial success, and also gratitude for it. The lobbyist has contributed $100,000 to the George and Eleanor McGovern Library, which was dedicated in October at Dakota Wesleyan University in Mitchell, S.D.

Both men say they have forgotten that McGovern fired Cassidy from the nutrition committee in early 1975 to make room on the staff for Bob Shrum, at the time a young political operative who McGovern hoped could help him run for president again in 1976. Shrum went on to advise eight losing Democratic presidential candidates.

McGovern's order to fire Cassidy, in a letter to Kenneth S. Schlossberg, staff director of the nutrition committee, can be found in McGovern's papers at Princeton University. Schlossberg interpreted that letter as a cue that it was also time for him to find a new job. He proposed to Cassidy that they start a consulting business, he recalled in an interview. They became 50-50 partners in a firm called Schlossberg-Cassidy & Associates, though they had no associates.

The Absent Alumni

Many of Cassidy's Democratic friends were in attendance at the rooftop party. Rep. Ed Markey (D-Mass.), for example, came prancing across the canvas "carpet" that had been laid on the roof to greet his host: "My Cassidy!" he proclaimed with a mischievous Irish grin, "I'm a fan of yours!"

Cassidy has long had good relations with members of the Massachusetts delegation, going back to his friend O'Neill, the speaker from 1977 to 1987, boom years for Cassidy's firm. Many of the early clients were Massachusetts institutions. By the end of that period, Cassidy was paying himself as much as $5 million a year, several times more than the earnings of even Washington's fanciest lawyers.

One of the loudest guests at the party was Russo, the former Congressman from the suburbs of Chicago who was defeated in 1992 and joined Cassidy the next year. At the party, Russo greeted his pals from the House with a booming voice, and had hugs and pats on the back for many -- a Chicago pol of the old school. On his Cassidy & Associates calling card, Russo has put an embossed, golden Seal of the United States and identifies himself as "Marty Russo, Member of Congress, Retired."

The guest list for the party was long, but so was the list of people who had played a prominent part in building the Cassidy firm but had not been invited. Many of the professional and personal relationships Cassidy developed over three decades had not survived. His mercurial personality and sometimes violent temper put an end to some of them; his ways of doing business ended others. Some left him for greener pastures.

Members of a large Cassidy alumni association could be found in lobby shops and public relations firms all around town. When someone left the firm, Cassidy tended to take it badly. He got into a prolonged legal action with one former employee and forced him into a settlement, a story that quickly made the rounds and had the desired effect. Only a fraction of the former employees was invited to the party on the roof, though the event had been the talk of the alumni for weeks.

The uninvited included some of the most important people in the history of the firm -- first of all James P. Fabiani. Fabiani was the third person to join the firm, after Schlossberg and Cassidy. He designed many of its procedures; he became its most successful marketer, luring in dozens of clients. But he and Cassidy fell out after 15 years of working together. Fabiani thought the firm had changed: "It went from . . . hard-charging, driven, we're-going-to-succeed-for-our-clients to a company preoccupied with money."

Ten-Percenters

One of the alumni who did make it to the rooftop terrace was William F. Cloherty, a feisty little fireplug of a man who came up with an idea that helped Cassidy soar. Cloherty had been working in the Tufts administration when Cassidy and Schlossberg won that first earmark for Jean Mayer. He quickly grasped that what Schlossberg-Cassidy had accomplished for Tufts could become the basis of a real business.

Through a connection with John Silber, the resourceful president of Boston University, Cloherty got to know Cassidy. Intense, bright, disheveled and hopelessly disorganized, Cloherty quickly bonded with Cassidy, a fellow hustling Irishman.

Cloherty proposed to work for Cassidy on a commission basis. He would receive ten percent of whatever fees the clients he brought in paid to the firm. By 1985 Cloherty had signed up 10 clients, eight of them universities. Over the years Cloherty collected hundreds of thousands of dollars in commissions without doing any lobbying himself. Cloherty's success prompted Cassidy and Fabiani to build a large stable of "ten-percenters," who became critical to the firm's early growth.

At the party, Cloherty spent a long time chatting with Silber, who had flown to Washington for the occasion. Prior to joining Cassidy, Cloherty had worked for Silber as BU's government liaison. Over a quarter century, BU has paid Cassidy millions of dollars in lobbying fees, and the school has received $106.5 million in earmarks from the federal government.

Cloherty's success reflected the firm's. For years in the 1980s, Cassidy and his colleagues could truthfully tell prospective clients that they never failed to win an earmark for an institution that had retained them. "Sometimes it took longer than we expected," admitted Elliott Fiedler, who worked at the firm from 1987 to 1995, "and sometimes the client had to settle for a good deal less than it hoped for. But for years every client eventually got something."

From its inception the firm also represented businesses. One of Cassidy's earliest corporate clients was the Ocean Spray Cranberry cooperative, a national organization of cranberry and grapefruit growers. Ocean Spray got him into the political contributions business; he set up a political action committee for the group and decided which members of Congress would receive its largesse. That only increased Cassidy's influence.

Selling the Firm Again and Again

In the decade that began in 1989, Cassidy & Associates was transformed. Cassidy was able to fulfill his dream of becoming not just prosperous and successful, but rich. In two stages, he sold a portion of the firm to an Employee Stock Ownership Plan, an unusual financial transaction that put $15 million in his pocket.

He used some of the money to greatly expand his business. He created Powell-Tate, a public relations firm named for its key partners, Jody Powell, President Jimmy Carter's press secretary, and Sheila Tate, press secretary to first lady Nancy Reagan. Cassidy also acquired a Republican lobbying firm, a polling firm and a grass-roots lobbying firm.

The Republican victory in 1994, taking control of Congress from the Democrats whom Cassidy had spent more than 20 years befriending, cost the firm about $6 million in revenue, or roughly 20 percent of what it had been making. Cassidy cut his own salary way back; for a couple of years he earned no bonus. But he survived, and business slowly picked up again.

'A Republican Lobbying Firm'

Another guest at the 30th birthday party was Rep. Roy Blunt of Missouri, the Republican whip in the House. Ten years earlier, a Republican as important as Blunt probably would not have attended an event honoring a Democratic lobbyist. But times changed after the Republicans took control of Congress in 1994, forcing Cassidy to adapt to Republican tastes.

His latest adaptation had been the hiring of Gregg Hartley, an open, friendly Missourian like Blunt, who had worked as Blunt's right-hand man for nearly all his political career. In 2003, following a path trod by countless other Congressional aides, Hartley had decided to "go downtown" -- to become a lobbyist. A bidding war for his services ensued. Cassidy won it with an offer of just under $1 million a year plus a substantial percentage of the lobbying fees paid by clients Hartley could bring to the firm.

Hartley had earned $150,000 as Blunt's senior aide. Now he was the chief operating officer of Cassidy & Associates. Hartley worked the crowd at the party with a friendly, low-key style. A number of the guests represented corporate clients he had attracted to the firm.

Blunt was a nice catch for the Cassidy party, but not in the class of the man who arrived soon afterward, surrounded by a bustling entourage. That was Tom DeLay of Texas, then still the House majority leader. His presence was probably a favor to Hartley, who had belonged to the House leadership's inner circle.

To have someone with Hartley's connections essentially running Cassidy's firm, as he has since 2005, showed how the times had changed Cassidy. "I'm running a Republican lobbying firm," Cassidy quipped sheepishly to an old friend.

* * *

One of the most influential guests at the party was a senior senator who once went after Cassidy in public -- Robert C. Byrd (W.Va.), ranking Democratic member of the Senate Appropriations Committee. In 1989, just after Byrd became that committee's chairman, he threw a theatrical temper tantrum when The Washington Post reported that the University of West Virginia had hired the Cassidy firm to help win an earmarked appropriation for an $18 million facility to study the uses of coal. When this became public knowledge, Byrd decided he was furious. He actually blocked the $18 million, which the House had already approved, and forced his home state university to fire Cassidy. In a speech on the Senate floor he denounced "lobbyists who collect exorbitant fees to create projects and have them earmarked in appropriation bills . . . for the benefit of their clients," a thinly veiled reference to Cassidy.

The episode created a political opportunity, prompting Byrd to draft the "Byrd Amendment," putting new restrictions on all lobbyists. It appeared to be a memorial to his anger at Cassidy.

So why, 16 years later, when he was 87 and frail, had Byrd come to a party to celebrate Cassidy? He responded to that question a little testily: "I'm here because I'm here. I was invited, and I decided to come."

Soon after the party another successful Washington lobbyist ventured an explanation: "That's simple. It's his cycle. He's up." Indeed he was. Republicans thought Byrd might be vulnerable, and they had targeted him in 2006. He was busily raising money to defend his seat, and Cassidy, it turned out, was doing his best to help.

Byrd's re-election committee later reported to the Federal Elections Commission that six weeks before his party, Gerald Cassidy had made a $2,000 contribution.

Then in November 2006, six months after the 30th birthday party, Cassidy & Associates' Political Action Committee made a $938 "in-kind" contribution to organize and pay the tab for a Byrd fundraiser at Finemondo, an Italian restaurant downtown. That event raised $16,645 more for Byrd, nearly all of it from employees of the Cassidy firm. One $2,000 donation was recorded in the name of Loretta Cassidy, the lobbyist's wife, whose pretty smile and high spirits lit up the party on the roof on May 17.

* * *

As the sun set and the party wound down, Cassidy took a microphone and spoke, very briefly:

"All I want to say is it's been a great time, I've enjoyed it. . . . I've had a great time over the years because of all of you. . . . I've loved being in Washington working on important issues. . . . My boss is here, Senator McGovern. He brought me to Washington 35 years ago and opened the door to a great life. Thank you."

Research editor Alice Crites contributed to this report.