Scandal's silver lining

Washington lobbyists profit from upheaval.

Published February 10, 1999 8:00PM (EST)

While Washington pundits have been decrying the effect of the impeachment crisis on the business of governing, all the chaos and congressional head-rolling has been very good for at least one business: lobbying.

The turmoil in Washington -- marked by a frenzy of revolving door departures and arrivals among lobbyists and congressional staffers -- is perhaps best illustrated by the quick career turnaround of John Feehery, currently new speaker Rep. Dennis Hastert's press secretary. At the end of October, he left his post as Republican Whip Tom "The Hammer" DeLay's communications director, joined Policy Impact Communications (co-founded by Ed Gillespie, former policy director for majority leader Dick Armey, and ex-GOP chairman Haley Barbour) as a lobbyist and media strategist. Then, in mid-January, Feehery signed up again with his fellow Illinois Republican, Denny Hastert. "They still want me to give back their pager," he jokes of his old firm.

While he asserts that he hasn't been lobbied by his former colleagues at Policy Impact Communications -- yet -- the well-connected firm is widely expected by Washington insiders to have especially good access in the year ahead. "I will always return their phone calls," Feehery admits. They should do well, Feehery argues, because Barbour and Gillespie are "well respected." That should come as good news to the firm's clients, including Visa and the American Hospital Association. As Feehery pointed out when he was still employed there, "One of the marketing tools we have is our close ties to the leadership."

Similar claims are being made all over Washington these days. In a subtle look-at-me dance among lobbyists and the press, certain names keep cropping up in the on-the-record and background talks as being close to Dennis Hastert and especially the new power in the House, DeLay. There's Bruce Gates of Washington Counsel; Mike Johnson of the APCO Associates public relations and lobbying firm; Dan Mattoon, the vice-president of Congressional Affairs for Bell South; Jack Abramoff and Bill Jarrell of Preston-Gates.

But part of their jockeying includes a humble downplaying of their new importance. As Bruce Gates, who became close to DeLay in their early battles for sweeping government deregulation, says, "The paparazzi aren't showing up at my office door; I'm not having trouble getting to my car at night." But he concedes there's an upside: more press interest in him and, he adds, "My relationship with the Republican leadership team has been appreciated and acknowledged for a while." Long-term clients such as General Electric and Merrill Lynch & Co. are among those who appreciate it.

For lobbyists such as Gates, DeLay's growing influence has made such strong relationships even more valuable than usual in Washington. In part, that's because DeLay and his hard-line Republican allies have been accused by critics of trying to freeze out Democratic-tinged lobbyists and businesses, earning a K Street reputation as bully-boys. They've taken extraordinary steps -- including circulating a list of lobbying firms' partisan spending and hiring patterns -- designed to pressure lobbying firms and other big business representatives to hire more Republicans, give more money and work harder on behalf of the pro-business Republican legislative agenda. (The House GOP's top business-related goals: lower taxes, limited HMO reform and deregulation.) "If you want to stay in the room, you've got to help," says one lobbyist close to DeLay's team. DeLay, in fact, has now become the main House Republican liaison to the business community.

Last year, DeLay and other Republicans unsuccessfully sought to pressure the Electronic Industries Alliance against hiring former Oklahoma Democratic Rep. Dave McCurdy as its president. It stirred lobbyists' anger at the heavy-handed tactics, but, says one high-ranking Republican leadership aide, "We don't trust these representatives. Democrats run the organizations and Republicans are caddies."

Thus, Republican lobbyists with long-standing ties to the leadership have a special advantage now. As the House Republican staffer points out, "It's a good business decision [for them]. You want to sit across the table and look at the person with a sense of trust and know that they're not going to stab you in the back." One firm he praises: Preston-Gates.

The Republican lobbyists at the fifth-ranked firm of Preston-Gates, particularly Bill Jarrell and Jack Abramoff, are so proud of their strong ties that they even have their own internal software program, "ConData," to measure and track them. In today's topsy-turvy world of congressional leadership and staff, you can't tell the players without a program. (That kind of computer power-tool befits a firm that represents Microsoft and was co-founded by Bill Gates' father, Bill Gates Sr., who is now retired.)

Jarrell, the tall, amiable former deputy chief of staff for DeLay, looks up some congressional names, points to the screen and says, "We're stronger now." On an access scale of 1 to 10, he estimates, Preston-Gates rated a 7 under Gingrich. "We were pretty close to Newt," he admits. But his and others' ties to DeLay are even better. "We're about a 9 now," Jarrell says. Even so, although Preston-Gates gave about 60 percent of its $194,000 individual and PAC donations to Republicans (according to an analysis by the Conservative Leadership Political Action Committee), it makes sure to have a fair share of Democratic lobbyists, too.

The firm, which pulled in $9.5 million in lobbying fees last year and represents more than 100 clients ranging from Pitney Bowes to the Choctaw Indians, has also reaped a bonanza of recent inside-the-Beltway publicity. It's all neatly packaged by the firm with highlighted quotes, almost like a smash Broadway show: "A heavy-hitting policy firm -- Legal Times" and "A D.C. lobbying giant -- Roll Call."

"We're in a great position," says Jarrell, who has been fielding a blizzard of calls from reporters, clients and Hill staffers, as well as from some lobbyists he hasn't heard from in quite a while. "They were reminding me," he recalls wryly, "of how close they are to the leadership" -- hoping that he'd plug them to reporters, too.

Still, Jarrell and other well-connected lobbyists don't want to appear unseemly as they quietly -- or not so quietly -- win new attention from the press and current (or potential) clients. "We're not running around advertising our friendships," says Abramoff, a veteran conservative Republican Party activist, a multimillion-dollar fund-raiser and, incidentally, a close personal friend of Tom DeLay. "We don't trade on it with anyone. But it's helpful." All the buzz about his firm, he adds exuberantly, is paying off: "We have a lot more people calling to give us business. It's great!"

Of course, the turmoil has had some casualties. Take, for instance, the momentary brush with inside-the-Beltway fame of an obscure lobbyist named Jay Stone, who happened to be a good friend of Rep. Bob Livingston of Louisiana, who was supposed to become the next speaker of the House before being derailed by yet another Washington sex scandal in mid-December. Back in early December, Stone had his brief, shining moment in the sun, winning attention in Business Week and National Journal and among the players on the Washington influence scene. It all seems so long ago now.

Other hot-wired firms and lobbyists have reaped benefits from the congressional upheavals unleashed by the scandals in Washington. One recalls meeting with a regular client who added extra monthly payments to his lucrative retainer, telling him, "I don't know if we'd give it to you if Newt was still there." The client's company decided to trim its payments to another lobbying firm that had been hired, in part, to secure more access to Gingrich. "It frees up money for us," the grateful lobbyist observes.

So much for the tragic legacy of impeachment and scandal in Washington.

By Art Levine

Art Levine is a contributing editor at Washington Monthly.

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