Podesta's departure came as the indictments of former Trump campaign chief Paul Manafort and his business partner, Rick Gates, raised questions about the work Podesta's firm did with Manafort to buff the image of the Ukrainian government. Podesta, 74, said he was quitting because of the barrage of criticism he's been getting as special counsel Robert S. Mueller III pursues the investigation.
"It is impossible to run a public affairs firm while you are under attack by Fox News and the right wing media," Podesta told employees at the Podesta Group offices on Monday, according to a person familiar with his remarks.
For decades, Tony and John Podesta — brothers who share a Jesuit education, a devotion to liberal causes and a passion for politics — have been central players in Washington. And in the past year, both have been drawn into the orbit of scandals.
Tony's Podesta Group is one of two firms described in Monday's indictment as having been recruited by Manafort and Gates to lobby on behalf of Viktor Yanukovych, the former president of Ukraine who fled to Moscow in 2014, according to people familiar with the company's involvement. Federal prosecutors have accused Manafort of creating a scheme to mislead the government about his secret work for a Ukrainian political leader.
Both the Podesta Group and the other firm, Mercury Public Affairs, have said they were hired to lobby for a European nonprofit based in Brussels trying to polish Ukraine's image in the West. But behind the scenes, prosecutors allege, the real client was a political party led by the former Ukraine president, who was friendly with Russia.
John Podesta, a longtime Democratic adviser who led the presidential campaign of Hillary Clinton, has spent the past year coping with the publication by Wikileaks of tens of thousands of his emails, which were hacked by someone using a computer with an address in Ukraine. The release of those emails ensnared him in the ornate conspiracy theory known as Pizzagate, in which some anti-Clinton activists came to believe, without evidence, that sexually abused children were being hidden below a pizza place in Northwest Washington — and that John Podesta was involved with satanic rituals there, a notion that police said was bogus.
In an emailed statement Monday, John Podesta said, "I view being attacked by Donald Trump and right wing media as a badge of honor."
To their opponents, the Podestas are quintessential swamp rats, exemplars of the permanent Washington establishment. Their defenders, however, view them as the oil that makes the gears of government turn.
"Advocacy is an important part of our process and it's an honorable profession," said former senator Tom Daschle (D-S.D.), now a lobbyist. "Both Podestas have been enormously successful, but we're in as toxic an environment as anyone living today has ever seen. The quality of governance has suffered immensely as a result."
The brothers, although close, are quite different.
"Tony is more gregarious and outgoing, and John is more introspective and quiet, but they are brothers and they are still close," said Ron Klain, who was chief of staff to vice presidents Joe Biden and Al Gore. "John is the eminence grise of the Democratic Party, and all the efforts by Republicans and completely crazy people to discredit him have not changed that."
Tony Podesta has been a pivotal figure in the murky connections between policy and politics, becoming wealthy on fees from industries and foreign entities that want something from Congress and the White House. He also bundles big donations and dispenses them to politicians who might someday be helpful to those lobbying clients.
He and his former wife, Heather Podesta, held lavish fundraisers for Democratic candidates at their home, which boasted a world-class art collection and a wine cellar with thousands of bottles. The Podesta brothers' mother made the pesto. Tony dressed the part of a man in full; he sported eye-catching neckties and red Prada loafers. "The pope wears Prada," he once told a reporter, "and so do I."
(Heather and Tony split up several years ago; according to court records and news reports, they spent 109 hours with a mediator before coming to a settlement on how to divide their art and other properties.)
Although the brothers created their lobbying firm together in 1988, John Podesta has spent most of his career inside government. He had several jobs in Congress and was President Bill Clinton's chief of staff and counselor to President Barack Obama.
"They're brothers, but they chose different roads to go down to craft good public policy," said Rep. Rosa DeLauro (D-Conn.), who knows both Podestas.
Tony Podesta worked on a string of losing Democratic presidential campaigns — from Eugene McCarthy's 1968 bid on through Hubert Humphrey, Ed Muskie, George McGovern, Ted Kennedy, Walter Mondale and finally Michael Dukakis in 1988.
That's when the brothers created Podesta Associates, which became the Podesta Group, representing some of the country's biggest and most powerful businesses, including Walmart, Bank of America and BP. (The Washington Post employed the firm in the early 2000s, when it was part of a public company controlled by the Graham family, then-owners of The Post.)
The Podesta Group collected $252 million in fees over the past two decades, according to data compiled by the Center for Responsive Politics. This year, the firm's top clients are Mylan, a pharmaceutical company; Wells Fargo; Crawford Group, the parent of Enterprise car rentals; and Lockheed Martin, the defense contractor, according to federal records.
Along the way, the firm also represented a number of foreign entities, including the government of Egypt under ex-dictator Hosni Mubarak.
"More and more, foreign countries turn to lobbyists to do work that diplomats once did themselves," said James Thurber, a government professor at American University who studies lobbying. "Things have gotten so much more complex in the last thirty years in the business that foreign companies and foreign countries do in Washington."
Monday's indictments described a multitiered arrangement in which Manafort and Gates are alleged to have pulled the strings as the other firms, cited only as Company A and Company B, were the publicly acknowledged lobbyists for the Brussels group. Sources familiar with the two companies' work said the descriptions in the indictment indicate that Company A was Mercury, and Company B was the Podesta Group.
"The Podesta Group has fully cooperated with the Special Counsel's office and taken every possible step to provide documentation that confirms compliance with the law," said Molly Levinson, a spokeswoman for the firm. She said the work the firm did "was in support of Ukraine's admission to the [European Union]," and the Brussels group certified that "it was neither funded by nor directed by a government or political party."
Michael McKeon, a partner at Mercury, said his firm disclosed that it worked for the Brussels group "with the intention of aligning Ukraine with western democracies generally, and the European Union specifically."
In 2012, when Manafort and Gates first sought out the two firms to lobby for their business associate in Ukraine, Gates wrote to Mercury that the firm would be "representing the Government of Ukraine in DC."