Cassidy gives a fifth of its staff walking papers

By Amanda Becker
Monday, December 20, 2010

It was pink slips and not holiday cards last week for a group of lobbyists who were let go by K Street's Cassidy & Associates.

About 20 percent of the group's staff -- eight lobbyists and four support staffers -- will be leaving the shop at the end of the year as part of a larger restructuring, confirmed firm founder Gerald S.J. Cassidy. Chief executive and former Illinois representative Marty Russo (D) is among those leaving, though he was not laid off and accepted a buyout. Cassidy will assume the joint role of executive chairman and chief executive going forward.

"Our intention is to reduce staff, then be able to re-enter the market and hire new people and expand the areas that our practice is growing in, or that we want to establish a practice in," Cassidy said.

The cuts were Cassidy & Associates' latest move to better position itself to work with an incoming Congress that has expressed its disdain for earmark lobbying, historically one of the shop's strengths. Over the past three years, federal lobbying revenue reported by the firm declined from $24.5 million in 2007 to $22.3 million in 2009, according to Center for Responsive Politics figures. The firm's finances were dealt a further blow when its relationship with its highest-paying client, work for Equatorial Guinea that brought in more than $2 million last year, ended this past summer.

In response, the firm has tried to bolster its nonappropriations work. Just last month, Cassidy announced it was absorbing the defense-industry-heavy Rhoads Group, which specializes in military base closure issues that will be the focus of a commission during the next Congress. Cassidy said the firm's focus going forward will be hiring policy experts with agency experience.

Despite the push to diversify and the rhetoric surrounding earmarks, Cassidy said he did not predict that K Street's appropriations work will evaporate entirely. In the 1980s, he pointed out, there was a similar outcry surrounding loopholes in the tax code. After legislation simplified the code , the loopholes quickly rematerialized and then proliferated. "I think the same thing will happen around earmarks," Cassidy said.

Industry watchers say if a omnibus spending bill passes with earmarks in place, it could buy appropriations-centric shops another year. But even if earmarks are removed, they will soon reappear under a different name.

"A lot of it won't change, it will just take place in another form," said Patton Boggs's Kevin O'Neill, deputy chairman of the firm's public policy group.

© 2010 The Washington Post Company