Guns Drawn on K Street After Video Game Survey

By Jeffrey H. Birnbaum
Tuesday, December 11, 2007

The Entertainment Software Association -- better known as the lobby for video game producers -- thought it was living in an alternate reality last week when a major public relations firm released the results of a national poll about its industry.

The PR firm, Hill & Knowlton, sent out a press release that blared: "H&K survey shows 60% of respondents agree that the government should regulate the sale of video games." Suffice it to say that was the last thing that the lobby wanted to read.

In fact, it had read the result before. This fall H&K competed for the association's PR business and conducted the survey as a way to show how eager it was to get the association as a client.

The association chose a different firm, however, and that's where the controversy begins. A statement by the association suggests that Hill & Knowlton's action smacks of retribution.

"Hill & Knowlton's decision to release these findings was both unprofessional and unethical," said Dan Hewitt, the association's spokesman. In addition, he said, "the release of only part of the findings paints an inaccurate picture of the entertainment software industry."

Among the poll's other findings: More than two-thirds of 18- to 34-year-olds play video games and fewer than one in five Americans think playing video games is a negative way to spend time with friends and family.

H&K denies that it released the survey out of vengeance. Joe Paluska, who heads the firm's technology practice, said Hill & Knowlton had planned to produce the survey later in the year as a way to show its "thought leadership" on the topic, but moved it up to meet the association's deadline for hiring a PR firm.

"We had always planned to conduct and publish a gaming survey," said Paluska, who describes himself as "an avid gamer."

The full poll results, Paluska added, are available upon request, and the press release says so.

The association isn't buying that explanation, however. "Its timing is questionable," Hewitt complained.

Clinton's D.C. Connections

No presidential contender has more friends on K Street than Sen. Hillary Rodham Clinton (D-N.Y.). The list of volunteer advisers to her campaign is a who's who of corporate lobbyists.

They include Steve Ricchetti of Ricchetti Inc.; Patrick J. Griffin of Griffin-Williams Critical Point Management; Joel Johnson and Susan Brophy of Glover Park Group; Charles M. Brain of Capitol Hill Strategies; Harold Ickes of Ickes and Enright Group; Steven A. Elmendorf of Elmendorf Strategies; Howard Paster of WPP Group; Timothy Keating of Honeywell; Michael S. Berman of the Duberstein Group; Peter Jacoby of AT&T; John A. Merrigan of DLA Piper; Jeffrey A. Forb e s of Cauthen Forbes & Williams; Daniel C. Tate Jr. of Capitol Solutions; Sandra Stuart of Clark & Weinstock; R. Scott Pastrick of BKSH & Associates; Anthony T. Podesta of Podesta Group; and Frederick H. Graefe.

If those were not enough, the campaign is also paying two well-known K Street denizens: spokesman Howard Wolfson, now on leave from the Glover Park Group, and Mark J. Penn, the campaign's chief strategist, who remains chief executive of Burson-Marsteller Worldwide, an international communications and lobbying firm.

Rolling Funder

The House Democrats' campaign committee is trying to lure donations by offering lobbyists the chance to meet Congress's real powers-behind-the-throne. On Thursday at the Hotel Monaco, the committee is holding a fundraiser that features staff directors of House committees and Democratic leadership offices, participants said.

In separate fundraising news, the House Republicans' annual big-donor weekend started early last Friday as lawmakers and other revelers were observed partying heartily as they rolled via Amtrak to New York -- to the annoyance of other passengers.

Private-Equity Split

Wall Street private-equity firms and hedge funds are on the threshold of a major victory in Congress. As we have noted here before, they hired what seems like half of K Street to prevent lawmakers from more than doubling the tax rate on their managers, and they appear to have succeeded.

But not every private-equity firm and hedge fund is happy. A separate piece of legislation that's still pending would raise tax rates on financial partnerships that go public. And that bill has divided the Wall Street firms enough to cause them to lobby against each other.

The Senate Finance Committee's chairman, Max Baucus (D-Mont.), and ranking Republican, Charles E. Grassley (Iowa), proposed the partnership tax hike earlier this year. It gave a few firms that had already gone public, such as Blackstone Group and Fortress Investment Group, five years until the higher rates kicked in. Other firms, such as Carlyle Group and Texas Pacific Group, which are still thinking about going public, would get whacked with the higher rates as soon as they sold themselves to public shareholders.

Private partnerships have been complaining that the five-year phase-in would give the already-public firms an unfair benefit. "That's out there for sure," said Rep. Jim McCrery (La.), the senior Republican on the tax-writing House Ways and Means Committee. "If you are somebody who is thinking of going public, you wouldn't want to be put at a disadvantage."

Blackstone, for one, says it is not fighting with anyone; it opposes the partnership tax hike in any form. In the meantime, firms not yet covered by a phase-in period are angling to get one.

Re-Hire of the Week

Richard R. Verma, for five years a national security adviser to Senate Majority Leader Harry M. Reid (D-Nev.), is returning to his old law firm, Steptoe & Johnson, to lobby and to practice international law.

Verma initially joined Steptoe in 1998. Before that he worked as a U.S. Air Force judge advocate as well as an aide to Rep. John P. Murtha (D-Pa.), who now chairs the House Appropriations defense subcommittee.

Hire of the Week

The Glover Park Group has hired Joy E. Drucker, former executive director of the Center for National Policy, as a senior vice president. Drucker will work with the lobbying and PR firm's international clients, including multinational corporations and foreign governments.

Drucker previously worked for the State Department and Stonebridge International, the consulting firm co-chaired by Samuel R. "Sandy" Berger and, as of yesterday, former senator Warren B. Rudman (R-N.H.).

Pro Bono Reminder

Please send your examples of notable pro bono lobbying and PR efforts to The special holiday column will soon be upon us!

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