By Matthew Mosk
Washington Post Staff Writer
Friday, November 14, 2008
Barack Obama spent much of his presidential campaign decrying the influence of Washington lobbyists. In the 10 days since he was elected, he already has had an impact: He has touched off a mini-boom on K Street.
Top lobbying firms are gearing up to handle increased demand from corporate clients who fear that the Obama administration will expand its regulatory reach and target them for tax increases. Some firms, such as Patton Boggs, Akin Gump Strauss Hauer & Feld, and Alston & Bird, are also preparing for new business resulting from the ongoing effort to stabilize the economy.
And who is cashing in on this boom? Democrats who supported Obama, such as Jaime R. Harrison.
Harrison helped mobilize voter turnout for Obama in South Carolina, and for the past two years he directed floor operations for House Majority Whip James E. Clyburn (D-S.C.) -- credentials that made him a sought-after addition to firms looking for an edge in a new administration.
"I built a lot of strong relationships with members, as well as their staff, and some of my very best friends worked on the campaign," Harrison said. He will start with the Podesta Group next week.
For some Republicans, this is bad news. Lockheed Martin, Boeing and Comcast have recently replaced Republicans in top corporate lobbying posts with Democrats. But most Republicans, especially prominent ones, profess little concern about Obama's desire to shake up the culture in Washington, or seem chastened by strict new rules aimed at weakening their influence.
"Barack Obama campaigned on change. Well, change is good for the lobbying business," said Ed Rogers, who was an aide to President Ronald Reagan and whose firm has represented such clients as Citigroup, Pfizer and Raytheon. "People will need the expertise and guidance more in the next year than they have in the last five."
Many of the issues Obama has expressed an interest in tackling early, such as health-care policy, energy and taxes, have broad implications for some of the lobbying world's most free-spending corporate clients. Patrick Von Bargen, a former chief of staff to Sen. Jeff Bingaman (D-N.M.) and aide to William Donaldson, the former chairman of the Securities and Exchange Commission, said he joined Quinn Gillespie this month with the expectation that his knowledge of clean energy issues would be a valued commodity.
"People who have labored in Democratic vineyards for years are familiar with the people involved, but also with the substantive issues, and how Democrats approach those issues," he said.
The shadow transition on K Street really began two years ago, when Democrats won control of Congress. For more than a decade, Republican-controlled lobbying firms had the exclusive ear of GOP lawmakers, and the industry worked in close contact with congressional leaders to develop policy and control the political agenda.
Laura Sheehan, who recently became vice president of marketing and communications for the American Gas Association, had been policy director at the Democratic Congressional Campaign Committee, and a top aide to Rep. John D. Dingell (D-Mich.).
"After the last election, when the House flipped, I got three to four serious job inquiries on election night just because of my party background," she said. She did not take any of those positions, but said the phenomenon has been compounded this year.
"In this climate, Democratic backgrounds are attractive to people," Sheehan said. "This town, that's what it runs on."
Some large firms that focused exclusively on an ability to connect with top Republicans began to view the 2008 election as a serious business problem. This was true of Rogers's firm, BGR Holding, which made its name with blue-chip connections in elite Republican circles. Shortly before Election Day, BGR signed a deal with Westin Rinehart to give his clients better access to a broader range of services, and to Democrats. "We wanted more familiarity with the inner workings of the Democrat machinery," Rogers said.
Other firms had already hedged against a partisan restructuring.
Ron Kaufman, a Republican lobbyist at Dutko Worldwide who served as a close adviser to President George H.W. Bush and Massachusetts Gov. Mitt Romney, said he cannot recall a better time to be a Democratic staff member looking for work. But he said his firm has always tried to keep both sides of the aisle covered so it does not have to panic during shifts in political control.
"The only change for us is that the Democrats are now the varsity squad, and I've been demoted to the junior varsity," Kaufman joked.
Republicans working at industry associations have felt some pain. But not all long-established Republican insiders have to worry about life in a town run by Democrats, said Michael S. Berman, a Democrat who is partnered with Republican Kenneth M. Duberstein at the Duberstein Group. Most are valued as much for their strategic advice as their Rolodexes, he said.
"Yes, this will be a different government," Berman said. "But there are clients we have worked for for years and never made a call to the Hill. You're advising people on how to structure their business -- that doesn't require a partisan contact. It requires knowing what's going on."
This week, Obama transition chief John D. Podesta told reporters that the president-elect would impose "the strictest and most far-reaching ethics rules of any transition in history," including a series of rules defining how the group that is planning the new administration will interact with the lobbying industry.
Political scientist Norman J. Ornstein said that while the rules "may exclude some good people with deep experience in their fields . . . it will also exclude those who see government service as a springboard to financial success, or who are more intent on pleasing future potential employers or clients than making tough choices in the public interest."
But almost from the start of his campaign, Obama made clear that he would not be slamming the door on interactions with lobbyists. In a December 2007 speech in Iowa, he said he was "running to tell the lobbyists in Washington that their days of setting the agenda are over. They have not funded my campaign. They won't work in my White House." But the candidate quickly backed away from that second part. A few days later in Waterloo, Iowa, he changed the phrasing to say that lobbyists "are not going to dominate my White House."
One bright line Obama will continue to draw is his prohibition on campaign contributions from lobbyists, now extended to cover the nonprofit accounts he has set up to pay transition costs and fund inauguration festivities. That is in keeping with the ban on donations Obama enforced during the campaign.
Steve Elmendorf, a former top adviser to former House minority leader Richard A. Gephardt (D-Mo.), said that he understands why Obama took that approach, but that he does not believe lobbyists will be turned away. "I don't think they've said 'We're not going to talk to lobbyists,' " Elmendorf said. "They are going to talk to stakeholders. The stakeholders are all going to be represented by lobbyists. It's not going to be a black-and-white thing."
Elmendorf is one of several who foresee a boon for the industry. A new Democratic administration and an increasing Democratic tilt in Congress means more activist government, he said. "That means businesses will have the potential for more things to happen to them. If they think that's coming, they will be hiring people to figure out how to contend with that."
Fred Wertheimer, president of the campaign finance reform group Democracy 21, said he is encouraged by the new transition rules aimed at restricting those who work in the administration from cycling into lobbying. "It shows he wants to attack the influence money culture that has permeated the city," Wertheimer said.
But Tony Podesta, John Podesta's brother and a top Democratic lobbyist, said the party's expanding ranks are not going to force him to curtail his work. "I'm not studying for the priesthood or thinking of opening a doughnut shop," he said.
Research editor Alice Crites contributed to this report.