Lobbyists team to form powerhouse shop

Two of the most experienced Democratic tax lobbyists in Washington have joined forces with a team of Democratic fundraisers and operatives to form what likely will emerge as one of Washington’s premier boutique lobbying shops.

The firm, Capitol Counsel LLC, will focus almost exclusively on two of the most powerful committees in Congress: the House Ways and Means and the Senate Finance panels. At least that is the initial strategy — the company may follow clients’ interests to other committees or to the House and Senate Democratic leadership. 

The venture is the brainchild of John Raffaelli, a tax lobbyist for more than two decades and founder of the Washington Group, which he helped build into one of the top 20 highest-grossing lobbying firms in town. Raffaelli sold his stake and left Washington Group at the end of last year because he wanted to focus on what he called his love, “lobbying on tax legislation,” instead of management.

Raffaelli now has formed a partnership with a lobbyist at Capitol Tax Partners LLP and longtime friend, James Gould, and two Democrats with strong ties to Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Chairman Charles Rangel (D-N.Y.). They are Shannon Finley, who just ended her service as Baucus’s political director, and David Jones, who spent five years working as a fundraiser for Baucus and more than 10 years raising money for Rangel.

“It was just a group of friends who all found themselves at a particular point able to get together and form a firm,” Raffaelli said.

Clearly, Democrats winning control of the Senate and House in November provided significant incentive for Raffaelli, Gould, Finley and Jones to team up.

“This wouldn’t have happened without the election,” Jones said.

Nevertheless, Raffaelli emphasized that bipartisanship would be a guiding principle of the firm, noting that many of the tax- and business-related issues that arise in Congress more often break down along regional rather than partisan lines.

“The whole reason I put together this group of tax-type people was not just because of their strong substantive backgrounds, but because they had real experience working in a bipartisan fashion,” he said. “The Democrat who knows how to work with Republicans is a unique combination.”

“That’s something we learned from Baucus,” he added in reference to Baucus’s close working relationship with Finance’s senior Republican, Sen. Chuck Grassley (R-Iowa.). Raffaelli also learned that lesson from his former boss, the late Sen. Lloyd Bentsen (D-Tex.), who chaired the Finance Committee in the late 1980s. Raffaelli recalled that Bentsen would not introduce Finance-related legislation unless it was cosponsored by a Republican member of his panel.

Toward that end, Raffaelli brought in a Republican lobbyist with more than 20 years of experience, Denise Henry, as the shop’s fifth principle member. Her new colleagues tout her as one of the most experienced healthcare lobbyists in Washington. Before joining Capitol Counsel, Henry founded and headed a healthcare advocacy firm, Strategic Health Solutions.

“I’m the only Republican in the firm and we’re hoping to add other Republicans as well,” she said.

Henry said she joined the firm as an owner because of her 15-year friendship with Raffaelli and because many of her healthcare clients were looking for representation on tax issues. She said she is not merely seeking shelter with Democrats in the aftermath of the Republican downfall.

“I’ve always had Democratic partners,” she said. “I think it’s important to be bipartisan.”

Henry’s expertise will fit in well with the firm’s focus on Finance and Ways and Means because of those panels’ primary jurisdiction over healthcare.

Beyond the tax-writing committees, Capitol Counsel boasts strong connections with the Democratic leadership and the newly ascendant California delegation.

The firm includes a former chairman of the California Democratic Party, Peter Kelly, and a former Democratic floor leader of the California state assembly, Mike Roos. That history will be useful given the senior positions of many Golden State Democrats.

“Obviously, the California delegation is important in the Democratic Caucus,” Jones said. “Kelly and Roos bring a lot of connections with California members.”

In addition to Speaker Nancy Pelosi, Rep. Pete Stark is chairman of the Ways and Means Health subcommittee, Rep. George Miller is chairman of the Education and Labor Committee, and Rep. Henry Waxman is the chairman of the Oversight and Government Reform Committee and the second-ranking Democrat on the Energy and Commerce Committee.

“The firm breaks into two worlds — one is Ways and Means and Finance, having strong expertise on the legislation, whether tax policy or health policy,” Raffaelli said. “The other piece of the firm is having ability on the House Democratic side.”

Another important pick-up for the firm is Richard Sullivan, who worked with Raffaelli at Washington Group and has been one of the biggest fundraisers in Democratic politics during the last 15 years. Sullivan served as finance director of the Democratic National Committee in 1996 and most recently as a member of the fundraising leadership team that fueled Sen. John Kerry’s (D-Mass.) 2004 presidential campaign.

Raffaelli was prohibited by agreement with Washington Group from bargaining with Sullivan, but that restriction did not stop Jones, who served as godfather to Sullivan’s son, from enticing him to join the team.

Jones’s friendship with Sullivan is one of several that bind the new firm. Raffaelli and Gould clerked together on the U.S. Tax Court in 1979. He has also known Jones and Henry for years.

Other firm members include Sara Franko, who formerly worked for Energy and Commerce Committee Chairman John Dingell (D-Mich.); Daniel Papadopoulos, who served as chief of staff to the late Sen. Daniel Patrick Moynihan (D-N.Y.); and Zahra Buck, who last year worked for then-ranking member Bennie Thompson (D-Miss.) on the House Homeland Security panel.